How Do Presidential Elections Impact the Housing Market?

How Do Presidential Elections Impact the Housing Market?

Every four years, as presidential elections draw near, many prospective homebuyers and sellers wonder how the changing political landscape might affect the housing market. While elections can create a sense of uncertainty, history shows that their impact on real estate tends to be small and short-lived. Here’s a closer look at what to expect from the housing market during and after an election year.

Does an Election Slow Down the Housing Market?

Election years tend to slow home sales as potential buyers adopt a “wait-and-see” approach. Data reveals that from October to November, home sales typically decrease by 9.8% in a regular year. In an election year, that drop is even more pronounced, with a 15% decrease.

This year, 23% of first-time buyers are holding off until after the election to make their purchase. This temporary dip in demand can create unique opportunities for those willing to buy during the election season.

Do More Homes Sell After an Election?

Yes, home sales tend to rebound following an election. Statistics show that home sales have increased 82% of the time in the year after an election. For 2025, experts are forecasting a rise in home sales from 4.6 million to 5.2 million homes. This increase indicates that as the uncertainty around elections fades, buyers and sellers regain confidence and return to the market.

What Happens to Mortgage Rates in an Election Year?

Election years often come with some financial volatility, which can impact mortgage rates. Historically, mortgage rates have decreased from July to November in election years 72% of the time. This year has been no exception, with mortgage rates reaching as low as 6.08% in September, down from nearly 8% last fall.

As a result, lower mortgage rates may encourage more buyers to enter the market, even during uncertain times. However, it’s essential to remember that these rates are influenced by broader economic factors beyond just the election.

What Happens to Home Prices After an Election?

One of the most reassuring trends for homeowners is that, historically, home prices tend to rise after an election. In fact, prices have increased 88% of the time in the year following an election. This year, national home prices are projected to continue their upward trend, with an anticipated 2.5% increase in 2025.

For both homeowners and prospective buyers, this trend is a reminder that the housing market has a track record of resilience, even in politically turbulent times.

The Bottom Line

While presidential elections can bring temporary fluctuations, the housing market typically stabilizes quickly. Buyers and sellers who stay informed and take advantage of timing trends may find unique opportunities amidst the election-year uncertainty. Overall, elections have a small, short-term impact on housing, with the market showing a strong tendency to bounce back.