Several factors can affect the real estate market and housing prices, among them the overall strength of the current economy, interest rates, and inventory. The U.S. presidential election is another event every four years that can impact home sales. According to Meyers Research, there was a median 15% drop in new home sales activity from October to November over the past 13 election-year cycles. During that same period in the year after the election, the median drop was 8%. The study also found that the year after the election showed the best sales of the four-year cycle. This suggests that housing sales aren’t necessarily lost in an election year but are pushed to the following year.
According to a study by New York real estate appraiser Johnathan Miller, Manhattan co-op sales are progressively weaker in an election year than in a non-election year. The most significant difference occurs in September when sales are 12.7% lower than in a non-election year. But like the Meyers study, Miller found that sales began to rise again once the election ended.
So, what causes the decline in sales? In a 2014 paper, economist Brandice Canes-Wrone of Princeton University attributed the slow sales during an election to buyers' reluctance to purchase since they aren’t sure how the election will affect their finances. She also found that where the races were incredibly close, and the winner got less than 55% of the vote, home sales fell between a third and half of a percentage point.
Because of the current low-inventory housing market, a presidential election year may be a good time if you are looking to purchase. With fewer buyers, there’s less competition, and sellers are potentially willing to cut deals. Like famed investor Warren Buffet says, “Be fearful when others are greedy, and greedy when others are fearful.”
If you want to purchase a home in 2024, contact the experts at NASB to help you secure the right mortgage loan. Give us a call at 888-661-1982.
