With the election behind us, many people may wonder what this means for the real estate market. While elections can bring significant changes in economic policies, regulations, and market sentiment, which may directly impact the real estate market, there will likely be little change in the market over the next year. Historically, the time following elections has been positive for buyers and sellers.
Home Sales
According to the National Association of Realtors and the Department of Housing and Urban Development, since 1992, home sales have increased the year following an election. Over the past few months, it may seem as though home sales have slowed down, but this is a common trend following the popularity of people moving during the summer months and early part of the school year. During an election year, many people hold off making large purchasing decisions, such as buying a home or car, until the election is over. The local market may seem slightly slower than normal, but within a few months, home buyers and sellers will be ready to move.
Home Prices
Over the long run, home prices tend to move in an upward trajectory following an election, but it’s understandable why some believe home prices may dip. Following seven of the last eight presidential elections, home prices steadily increased. The only exception was after the 2008 election and the housing crash that took place soon after. Based on historical data, it’s safe to expect housing prices to continue a steady increase, but likely not as sharp as we saw following the 2020 election.
Late fall and winter are traditionally slower in real estate, which coincides with our election season, so prices may not be changing because of the election but simply because it’s getting colder and people don’t want to move.
Mortgage Rates
Politics, the economy and mortgage rates are all connected. Only twice since the 1984 presidential election have mortgage rates increased leading up to election day. According to Freddie Mac, mortgage rates have a history of lowering starting the summer of an election year and continuing through the early parts of the following year; we’ve seen this happen over the past few months. It’s too early to predict if this trend will continue into 2025, but there are currently no signs that an increase is on the horizon. The best option for anyone looking to purchase a home next year is to pay attention to mortgage rates and speak with an experienced Realtor.
While Realtors might not have a crystal ball to foresee the housing market’s future, they can provide invaluable advice on navigating a sale and preparing for successful negotiations.