As the upcoming Presidential election approaches, you might find yourself speculating about its potential impact on the real estate market. It’s natural to feel a bit of uncertainty about what’s ahead, especially when making significant decisions like buying or selling a home. But here’s some reassuring news: historically, Presidential elections have had only a minor and temporary effect on the housing market.
If you’re considering making a move this year, you’re likely curious about how the election might influence the Fairfield County real estate market. Understanding the facts can help you make informed decisions without unnecessary hesitation.
Home Sales: A Temporary Slowdown, Then a Rebound
Typically, in the month leading up to a Presidential election (from October to November), the housing market experiences a slight slowdown (see graph below):
This can be attributed to some buyers and sellers choosing to wait and see how the election results might affect the economy. However, it’s important to note that this slowdown is usually small and temporary.
Historically, home sales tend to bounce back and even increase in the year following a Presidential election. Data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) indicates that after 9 of the last 11 Presidential elections, home sales rose the following year. This trend has been consistent since the early 1990s, suggesting that the market quickly regains its momentum post-election.
Home Prices: Steady As They Go
Another common concern during election years is the potential impact on home prices. Do prices decline? Generally, no. As residential appraiser and housing analyst Ryan Lundquist points out, an election year doesn’t typically change the price trend already occurring in the market.
In Fairfield County, like many other regions, home prices have generally continued to rise over time, regardless of election cycles. NAR data reveals that after 7 of the last 8 Presidential elections, home prices increased in the following year (see chart below):
The one notable exception was during the 2008-2009 period, which coincided with the height of the housing market crash—a unique situation not related to the election itself. Today’s market is much more stable, and while prices may be moderating nationally, they’re not in decline.
Mortgage Rates: A Potential Opportunity
Mortgage rates are another factor that could be on your mind, especially if you’re planning to finance your home purchase. Historically, mortgage rates have decreased from July to November in 8 of the last 11 Presidential election years, according to data from Freddie Mac. This trend suggests that the election season could offer favorable conditions for buyers looking to secure lower mortgage rates (see chart below):
This year, experts predict that mortgage rates may ease slightly throughout the remainder of 2024. If this forecast holds true, it could mean increased purchasing power for buyers in Fairfield County.
What This Means for Your Real Estate Plans
So, what does all of this mean for your decision to buy or sell a home in Fairfield County during an election year? The key takeaway is that while Presidential elections can influence the housing market, the effects are typically minor and short-lived. As Lisa Sturtevant, Chief Economist at Bright MLS, notes, “Historically, the housing market doesn’t tend to look very different in presidential election years compared to other years.”
For most buyers and sellers, this means you can proceed with confidence, knowing that the market remains robust and resilient, even amidst election-related uncertainties.
Bottom Line
While it’s understandable to feel some apprehension during an election year, history shows that the Fairfield County real estate market is strong and adaptable. You don’t have to put your plans on hold. For personalized guidance and expertise in navigating the market during this election cycle, let’s connect and discuss your goals.
