As we approach another presidential election, the real estate market prepares for potential shifts and opportunities. At Treadstone, we understand the importance of staying informed amidst the noise and uncertainties.
Stability Amidst Change
Many people believe that election years cause significant shifts in real estate activity, but in our area, the overall transaction numbers generally remain steady until the last quarter. Typically, home sales are on par with those of a non-election year, with November being the key exception. During election years, November tends to be slower as buyers and sellers may feel hesitant about making major decisions. However, it’s important to recognize that these transactions are often just delayed, not lost. Additionally, the reduced demand in the months leading up to the election can create opportunities for those ready to act.
Mortgage Rate Expectations
A common worry for potential homebuyers during election years is how mortgage rates will behave. Historically, though, rates tend to decrease between July and November in election years. We have already begun to see rates drop this year, with the national average rate for 30 year mortgages at 6.12% as of the beginning of October. While political shifts can affect market sentiment, our priority is to offer steady support and guidance through these changing conditions.
Market Performance Insights
Historical data reveals that home prices have risen by an average of 4.84 percent during election years since 1987, compared to a 4.44 percent increase in non-election years. While this might seem to suggest that presidential elections boost the housing market, the reality is more complex. For instance, 2008 marked the worst year for housing, with home values plummeting 12 percent, while 2021 saw the strongest gains, with prices jumping 18.9 percent due to record-low mortgage rates and the pandemic-driven housing surge. General election years often bring a cooling effect to the real estate market due to uncertainty, which can present opportunities for those ready to take advantage.
Post-Election Opportunities