How Does the Presidential Election Impact the Real Estate Market?

As June comes to a close, many of us turn our attention to the second half of the year. This period will surely be filled with intense rhetoric surrounding the November election. Despite such times, the real estate market continues to move forward. How does a Presidential Election impact the real estate market?

Elections influence the national housing market and mortgage rates through three primary channels: uncertainty, policy expectations, and consumer confidence. This phenomenon is often referred to as the "wait and see" effect. During the back end of the fall market home sells usually see a steep decline in election years.

Can you get a deal during election years? In 8 of the last 11 election years, mortgage rates have fallen, only to increase competition the following year. We are trending towards lower rates as we head into the fall season. We are also seeing many price reductions at the higher price points, presenting opportunities for those in the luxury market. With rates trending lower before the election, it could provide relief for these home buyers who have been struggling to find a house they would prefer with less competition.

In 7 out of the last 8 elections, home prices have increased. This trend is expected to continue, especially here in Atlanta. We have finally seen some relief on inventory issues this summer but we are back to our normal seasonal real estate markets. July and August will see a large drop in home sales and an increase in price decreases. Expect the market's inventory to tighten once more as we get into the fall, the second most popular time to purchase a home. Once we move into 2025 the market will once again most likely take off, if historical themes continue.

No matter who you want to win this election, the data proves the real estate market will continue to move along. For those currently in the market this period could provide you some relief on mortgage rates and increase inventory. Sellers, you will still be able to maximize your profit on your property, it just may require a bit more patience than we have experienced these past few years. 

Sources: NAR, HUD