Impact of the presidential election on home prices
Now that the presidential election has been decided, many buyers and real estate investors are wondering: how will this impact the housing market? While we cannot predict what specific policies the new government will enact, we can look at past housing data to get a sense of what might happen this time around. Let’s dive in!
We are coming off one of the most closely watched election cycles in our nation’s history and a lot of people are wondering what might happen to the housing market.
First, it’s worth noting that presidential elections always occur in the 4th quarter, a time when we typically see a seasonal slowdown—whether there’s an election or not. However, during an election year, this dip can be more pronounced and we’ve certainly saw a quieter October. With that said, data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) shows that after most elections, the number of home sales increase in December and often climb steadily in the following year… in fact, this has occurred in nine of the last eleven presidential elections.
So what about home prices? How will they fare?
It’s pretty well documented that home prices have historically risen year-over-year, regardless of the election cycle, and have certainly gone up over the long term. The latest data from NAR supports this. After seven of the last eight presidential elections, home prices have increased the following year. The only time prices dropped after an election was during the housing market crash of 2008… a very unique situation where the supply of homes was far greater than the demand. Today’s market conditions are very different as experts have indicated that we are currently UNDER supplied by millions of homes.
So, What Does This Mean for You?
If you’re thinking about buying a home or investment property, the data suggests now might be a good time, as home prices typically increase in the year following an election.
