As the 2024 Presidential Election Approaches: What It Means for the Housing Market
With the upcoming 2024 Presidential election just around the corner, you may be curious about its impact on the housing market. Here’s a closer look at what typically happens during election years and what it might mean for home sales.
A Temporary Slowdown During Election Years
Home sales tend to dip slightly each fall due to seasonal factors. However, in election years, data from BTIG shows that the market often experiences a somewhat larger slowdown in the month leading up to Election Day (see graph below):
Why the Wait? It’s All About Uncertainty.
In times of political change, many consumers hit pause on big decisions, like buying a home, as they wait to see the election’s outcome. This pattern consistently appears in the housing market, with both buyers and sellers hesitant to commit until the dust settles.
This year is no exception. A recent Redfin survey found that 23% of first-time homebuyers are holding off until after the election—a significant portion likely influenced by the same uncertainty.
A Post-Election Rebound in Home Sales
Fortunately, these postponed sales don’t disappear; they simply wait. Historically, home sales rebound strongly once the election is over. In fact, in 82% of past election years, home sales have risen in the year following the vote (see chart below):
Why Do Sales Rebound? Confidence Restored
After the election, buyers and sellers gain clarity on what lies ahead, which often restores confidence and encourages them to move forward with their plans—leading to an increase in home sales.
What’s in Store for 2025?
If the past is any guide, we can expect a surge in home sales next year. Current forecasts support this trend, projecting that the housing market will close 2024 with approximately 4.6 million home sales, with an anticipated rise to 5.2 million in 2025 (see graph below):
This Follows the Usual Post-Election Rebound Pattern
While the market may feel slower now, this is typically a temporary pause rather than a lasting trend. As seen in previous election years, the market often picks up once election-related uncertainty clears, bringing buyers and sellers back into action.
Bottom Line
Election years may cause a brief slowdown in the housing market, but it’s usually short-lived. Those delayed sales aren’t lost; in fact, history shows a strong rebound in home sales following elections. With forecasts pointing to a busy 2025, those waiting for a clearer picture can expect the market to gain momentum in the months to come.
