If you’re wondering whether the U.S. presidential election impacts the real estate market, historical data provides a clear answer: Yes, the year following an election is often a boom period for home sales.
Historically, home sales have often risen the year after a presidential election, with sales increasing in nine of the last eleven election cycles. Forecasts for next year suggest around 4.6 million existing home sales, which could certainly extend this consistent trend.
Why the Anticipated Increase Happens
The market doesn’t react to who wins, but rather to the removal of uncertainty.
1. Buyer Hesitation Ends
During an election year, many major financial decisions get put on hold. Data shows that up to 23% of first-time buyers are specifically waiting, mainly due to high prices and uncertainty around mortgage rates. Once the election is over, that large pool of sidelined buyers starts moving, driving activity.
2. Rate Forecasts Stabilize
The bond market, which dictates mortgage rates, loathes uncertainty. After an election, the likely policy path becomes clearer, leading to mortgage rate forecasts stabilizing or even easing slightly. This anticipated decrease in borrowing costs helps bring more buyers into the market, often creating a faster pace of sales in the following year.
3. Pent-Up Demand Unleashes
The combination of sidelined buyers and clearer rate expectations unleashes pent-up demand. People who needed to move but chose to wait out the political noise finally enter the market, creating a strong surge in transactions.
What This Means for You
If the historical trend holds, the early part of next year could see a significant jump in competition.
- For Buyers: If you’ve been waiting, the quietest window to negotiate might be right now, before the post-election surge begins.
- For Sellers: Anticipate a potentially more active market next year, but use this time to prepare your home and pricing strategy with precision.
Let’s discuss how to use these historic trends to your advantage.
