As the 2024 presidential election approaches, there is growing curiosity about how the political climate will influence the real estate market. While election years typically bring some uncertainty, especially when it comes to big financial decisions like buying or selling a home, the real estate market may not be significantly swayed by the election itself. However, with mortgage rates and housing affordability being hot-button topics this year, the coming months could present unique opportunities in the industry.
Election Year Myths and Reality
It's often believed that elections slow down the housing market, as uncertainty tends to make buyers hesitant about big decisions. However, historical data doesn’t back this up. A Bankrate analysis of the S&P CoreLogic Case-Shiller Home Price Index reveals that home prices have actually risen more during election years than in non-election years. Between 1987 and 2023, home values increased by an average of 4.84% in election years, compared to 4.44% in other years.
Experts point out that broader economic factors—such as supply, demand, and interest rates—have a far greater influence on the housing market than elections. Similar to previous years, 2024’s market trends are expected to be driven primarily by housing affordability, inventory, and mortgage rates.
Will Election Uncertainty Impact the Market?
While political uncertainty can lead some buyers and sellers to delay decisions, this hesitancy is often short-lived. Home sales may slow down temporarily in November, but history shows that they often rebound by December and continue growing into the following year. For example, data from the National Association of Realtors (NAR) shows that home sales typically increase in the year after an election, which is great news considering all of the recent housing market factors.
The 2024 election could still bring some unique challenges, particularly for high-income buyers in the luxury market, as they may take a more cautious approach given concerns about potential post-election instability and the greater risk associated. Outside of the luxury segment, significant fluctuations in home prices are not anticipated in the near future.
Final Thoughts on the Housing Market Impact and Opportunities
Fortunately, the 2024 election is not expected to cause a major disruption in the real estate market. While there may be a slight slowdown in home sales as November approaches, a potential drop in mortgage rates could drive up demand and counteract any election-related hesitancy. Home prices are expected to stay relatively stable, and if rates fall as expected, many buyers could benefit from improved affordability.
The key takeaway for buyers and sellers is that while elections can create short-term uncertainty, their overall impact on the real estate market tends to be minimal. This presents a great opportunity for those looking to buy or sell. Staying focused on mortgage rates and broader economic trends, rather than political noise, will be essential for making informed real estate decisions through the remainder of 2024 and into 2025.
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Sources:Bankrate
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