So this is a question that is on a lot of people's minds right now and it's difficult to just search up actual data to confirm or deny suspicions on whether a presidential election has a major impact on the housing market. Many people also perceive that a presidential cycle also has an impact on the economy, and while there may be a little truth to that, it's difficult to lay blame for the 2008 financial debacle or COVID-19 or wars on another continent on the hands of the then president. Now I understand this is a sensitive subject, so let’s stick to the data and break it down in to home sales volume, pricing trends and interest rates.

So, the CEO of Lexar Capital Management says it really well... "Presidential election years affect the national housing market and mortgage rates through three interrelated channel - uncertainty, policy expectations and Consumer confidence. This is because consumers may choose to postpone major purchases or sales until they gain greater confidence in the country’s direction. "

Currently, there is a lot of uncertainty about who is going to win and the direction they may take in regards to policy making, although nothing happens overnight, we still just lack confidence in the overall direction of the country. Looking back, you'll see that our nation is forever wrestling with issues not necessarily caused by the prior cycles administration but are always those the American people have strong feelings, or fears, about.

If you look at this right here, in 2008 we certainly remember that global financial crisis and subsequent recession caused by the housing crisis resulting in the longest economic recovery in history spanning 3 election cycles. In 2012 there was the fiscal cliff, healthcare expansion by the Supreme Court, the European debt crisis, carried over into 2016 as Brexit. If you remember that 2020 the pandemic which began in one cycle and spilled over into the next couple years and right now in 2024, we are still talking about lingering high inflation, dealing with interest rates, plus the multiple wars in the Ukraine and Gaza. It always is something, right?

Ali Wolf says, "usually, home sales are unchanged compared to a non-election year with the exception being November. In an election year, November is slower than normal." And maybe a month or so leading up to November, people are putting their hands in their pockets and resolving to holding off on major expenditures, such as listing or buying a home. Her comments likely based on this data showing home sales are affected in a presidential election year. This graph demonstrates there is a seasonal drop in home sales from october through november. Always - consumers are busy adjusting to their fall schedule and prepping for the holidays and All real estate agents know and feel this every year, but this actually puts the numbers behind it. On the left in the gray are non election years 1963-2019, and the red is the seasonal drop during a presidential election year. Its a little over 5% more of a slow down. not dramatic, but notable.

One of the big takeaways today is that home sales, in 9 out of the 11 last presidential elections, increased in the year after the election was concluded! Typically, the first year of the 4-year presidential term, is the best year for housing. People are finally saying, "okay" whether they got their candidate elected or now, "I now know a little more of what to expect and feel comfortable making a move." 

Now while we don't have a crystal ball to answer definitively about this year, we do have this from Ryan Lundquist, "An election year doesn't alter the price trend that is already happening in the market." 

We are currently seeing a housing market that is getting better. It's stabilizing at the moment. Interest rates are slowly declining as inflation is slowing. And that’s great! However a Lot of people are wondering about home prices, and since that has been on a continuous upward trend, although not as drastic as 2020 and 2021 we can say that, based on historical data, this is likely to continue. 

The numbers are consistent with Lundquist’s statement illustrating that, with the exception of 2008, home pricing in 7 out of the last 8 cycles has increased the first year after a presidential election. This is for existing home sales. And for new homes, 10 out of the last 11 cycles, new home prices increased, again with the exception of 2008. Wolf goes on to explain that, "in December, following an election, and in the following year, the sales that are lost during November are recovered. It isn't that consumers say, "im nervous and i NEVER want to buy", they say, "im nervous. let's just wait to see how things play out."

The final piece of information to consider the impact of is mortgage rates. Interestingly, mortgage rates decreased in the months leading up to an election in 8 out of the 11 cycles, all the way back to the 1980s. Now we don't think there is necessarily a hard correlation between rates and an election cycle because the changes aren’t significant, but there is a little bit of a trend. And in today's economy, we are hoping and praying for rates to come down.

The bottom line is as Bankrate puts it, "for most Americans, election results will have little direct effect on their income and therefore should NOT significantly impact their decision to buy or sell a home." and we think this is true even tho the perception may be otherwise.

so there you have it. Please rewatch this because i know i went through this very quickly. But most importantly, if you are trying to assess whether you can or should buy a home, or put your current home on the market right now, please give me a call as the decision is highly personal for you and an expert agent like me can provide the data specific to your financial goals so you can make an informed decision.

thanks for watching and take care!