As the 2024 presidential election approaches, many prospective homebuyers are asking themselves whether it’s a good time to buy a home or if they should wait until after the election to see what happens. It’s natural to feel uncertain in an election year, especially when major financial decisions are at stake. However, history tells us that waiting until after the election could cost buyers more than they realize. Both home prices and mortgage rates often rise post-election, and waiting could mean facing more competition in the market. Here’s why buyers should consider moving forward now rather than delaying their homeownership plans until after the ballots are cast.
Election Year Uncertainty: The Market Slows Down Temporarily
During an election year, a “wait-and-see” mindset tends to take hold of many consumers. Buyers and sellers alike become more cautious, wondering how the outcome of the election might affect the economy. This uncertainty can cause a temporary slowdown in the housing market, particularly in the months leading up to the election. According to data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR), home sales typically dip slightly from October to November in presidential election years(What’s the Impact of Pr…).
However, it’s crucial to understand that this slowdown is both minor and short-lived. Historically, the market rebounds quickly after the election, with home sales often increasing the following year. In fact, after 9 of the last 11 presidential elections, home sales rose in the year following the election(What’s the Impact of Pr…). This means that while some buyers may wait, those who take advantage of the temporary lull can benefit from less competition and potentially better deals.
Home Prices Are Likely to Rise After the Election
One of the biggest myths about election years is that home prices will fall. However, data shows that home prices rarely decrease due to an election. As residential appraiser and housing analyst, Ryan Lundquist points out, “An election year doesn’t alter the price trend that is already happening in the market”. This means that if home prices are already on an upward trajectory, the election is unlikely to reverse that trend.
Historical data supports this claim. According to the National Association of Realtors, home prices increased in the year following 7 of the last 8 presidential elections. The only exception was 2008, a year marked by the global financial crisis, which was an outlier compared to typical election years. Today’s housing market is far more resilient, and while price increases have moderated in some areas, there is no significant downward trend on the horizon.
For buyers, this means that waiting until after the election could result in higher home prices. By purchasing now, buyers can lock in current pricing and avoid the risk of paying more in the future.
Mortgage Rates Tend to Drop Before Elections—and Rise After
Mortgage rates are another key factor that buyers need to consider. Many people assume that interest rates will remain stable or even drop after the election, but that’s not always the case. Historically, mortgage rates tend to decrease slightly in the months leading up to a presidential election. In 8 of the last 11 presidential election years, mortgage rates fell between July and November. This pattern has already begun in 2024, with experts predicting that rates will continue to ease in the short term.
However, the post-election period can bring uncertainty to the mortgage market. Depending on the election outcome and the policies of the new administration, mortgage rates could rise again as lenders respond to changing economic conditions. For example, after the 2004 election, mortgage rates rose as fiscal stimulus expectations increased following the re-election of George W. Bush.
The takeaway for buyers is clear: waiting until after the election could mean missing out on today’s lower mortgage rates. Locking in a lower rate now can significantly reduce monthly mortgage payments and save thousands of dollars over the life of the loan.
Rising Prices and Rates Could Limit Your Buying Power
When you combine the potential for rising home prices and higher mortgage rates, the cost of waiting becomes even clearer. Even a small increase in mortgage rates can have a significant impact on affordability. For example, if mortgage rates increase by just 1%, a buyer’s monthly payment on a $300,000 loan could increase by more than $150. Over the course of a 30-year mortgage, that adds up to an additional $54,000 in interest.
Furthermore, rising home prices mean buyers will have less buying power. A house that is affordable today may become out of reach after the election, especially if both prices and rates go up. For buyers who are currently on the fence, the best way to maximize their purchasing power is to act now, before the election-induced uncertainty passes and the market returns to its normal rhythm.
Take Advantage of Reduced Competition Now
In addition to locking in lower prices and interest rates, buyers who act before the election can also benefit from reduced competition in the market. As we’ve already noted, many buyers adopt a “wait-and-see” approach during an election year, leading to fewer transactions in the months leading up to November. This temporary dip in demand can create opportunities for savvy buyers to negotiate better deals and potentially avoid bidding wars that might arise after the election.
Sellers may also be more motivated to make concessions during this quieter period, making now an excellent time to secure a home under favorable terms. Once the election is over and buyer demand picks up again, the competition for homes is likely to increase, driving prices higher.
Conclusion: Don’t Let the Election Hold You Back
While it’s natural to feel a bit uncertain during an election year, history shows that the housing market remains strong and resilient. The temporary slowdown in sales leading up to the election presents a unique opportunity for buyers to secure a home at today’s prices and interest rates. Waiting until after the election could cost you more in both rising home prices and higher mortgage rates, limiting your buying power and increasing your long-term costs.
If you’re ready to take advantage of today’s market conditions, don’t wait. Contact a CENTURY 21 Edge agent and let’s get started on your home search before the election heats up and the housing market shifts again.
