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Do Elections Impact the Housing Market or Vise Versa?

Historically, Presidential elections have had only minor, short-term impacts on the housing market. Let’s first look at how demand, home sales, mortgage rates and have typically behaved during these periods.

Demand

Uncertainty over what a presidential election will mean for future economic policies can cause hesitation for some buyers and sellers, Fox Business Reports. Regardless, this is usually only a "small factor" in the overall market. And data suggests that usually the buyers and sellers move forward.


Home Sales

In November of election years, there's usually a slight dip in home sales. This is mainly due to uncertainty, with some people hesitating to make major decisions. However, this slowdown is temporary. Sales generally rebound in December and continue to rise in the following year. Data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) indicates that after nine of the last eleven Presidential elections, home sales increased the next year.


Mortgage Rates

Mortgage rates, which determine monthly home payments, are also worth watching. Most forecasts predict a slight easing of rates for the rest of the year. Historically, rates tend to decline leading up to elections, which could benefit buyers by lowering monthly payments.


Home Prices

Home prices generally remain stable and resilient during election years, typically rising year-over-year regardless of the political climate.


The Flip Side – Affordability will Influence the Election

But, the question that everyone might want to consider: will elections influence the housing market, or will the housing market influence the election? As Inman reports,  fifty-three percent of U.S. homeowners and renters said they completely or somewhat agree that housing affordability will impact whether they vote for Democratic or Republican in 2024. An additional 2/3rds of respondents stated that housing affordability makes them negatively view the economy.

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