Impact of Presidential Elections on Housing Prices

In an election year, there is often plenty of speculation about the future of the economy and its effect on the housing market. The occupant of the Oval Office can certainly impact broader economic factors, but historical data shows that the influence of presidential elections on home prices is generally minimal and short-lived. To help you better understand the current landscape, here is a look at home price trends during past election years.

**How Does an Election Year Affect the Housing Market in the Short Term?**

Generally speaking, home prices tend to increase regardless of who is in office. However, presidential elections can cause a temporary dip in demand. In most years, the volume of home sales decreases in the fall after peaking in the summer. This trend is often more pronounced during election years.

A study by Meyer’s Research showed that during the last 13 presidential election years, the median number of new home sales dropped by about 15% between October and November. In comparison, the typical decrease in non-election years is closer to 9.8%.

This temporary hesitation among buyers is due to uncertainty about the future economy. Many would rather wait to see the outcome of the election before making a large investment. However, historical trends show that this slowdown is usually short-lived, with demand bouncing back quickly after the election.

So, does that mean November is a bad time to sell a house? In an election year, waiting until the dust settles might lead to more offers. However, the long-term impact on prices is often minimal.

**How Are Home Prices Impacted in the Long Term?**

While housing prices might experience a brief slowdown in the lead-up to an election, data suggests this doesn’t last long. Once the election is over, the market typically stabilizes, and prices continue to rise.

According to a Bankrate analysis of the S&P CoreLogic Case-Shiller Home Price Index, the average home appreciation rate during election years was 4.84%, compared to 4.44% in non-election years. Additionally, home sales tend to increase in the year following an election, as shown by data from the National Association of Realtors (NAR) and the Department of Housing and Urban Development.

The data also shows that home prices increased after 7 of the last 8 elections. The exception was in 2009, which followed the subprime mortgage crisis—an event driven by broader economic conditions rather than the presidential election. Historically, real estate appreciation has followed an upward trend regardless of election outcomes.

**Do Interest Rates Drop During Election Years?**

While presidential elections have little long-term impact on housing prices, the administration in power can influence economic policies that affect the housing market, such as interest rates.

The President appoints the chairman of the Federal Reserve, which sets monetary policy and determines interest rates. The Federal Reserve’s decisions have a significant effect on mortgage rates, which in turn affect who can afford a home loan.

Do interest rates decline during election years? Data suggests that mortgage rates tend to dip. In 8 of the last 11 election years, mortgage rates decreased between July and November, offering potential buyers a financial advantage during the election period.

**Should You Buy a Home During an Election Year?**

You may be wondering how this information should influence your decision to buy a home. The data shows that while there may be a temporary dip in sales activity during an election year, the housing market typically rebounds quickly. Lower mortgage rates during this period can also provide buyers with favorable conditions.

Ultimately, your decision to buy should be based on your personal situation rather than concerns over the election. There may even be an opportunity to take advantage of reduced competition in the lead-up to election day. Future predictions suggest that housing prices will continue their steady rise, regardless of who is elected.

As a seasoned realtor with over 20 years of experience in the Williamsburg area, I’ve guided clients through many different market conditions—including election years. My goal is to provide clear, data-driven insights so that you can make confident decisions, no matter the broader economic climate. Whether you’re buying or selling, I’m here to help you navigate the unique factors at play and make the most of your real estate opportunities. If you have any questions about how the current market or upcoming election might impact your home buying or selling process, feel free to reach out.

Contact John Womeldorf
Phone: 757-254-8136

Email: [email protected]

Website: mrwilliamsburg.com