How Presidential Elections Spark a Rebound in Home Sales

As the 2024 Presidential election draws near, you may be curious about its effect on the housing market. Let’s dive into the details.

Election Years Often Bring a Temporary Slowdown

Every fall, it’s normal to see a slight seasonal dip in home sales. But according to data from BTIG, election years tend to see a slightly larger decline in home sales during the month leading up to Election Day (see graph below):

Why is this the case? In a word: uncertainty. Many consumers hold off on big decisions, like buying a home, until they see how the election unfolds. This is a well-documented trend, especially in the real estate market.

This year is no exception. A recent Redfin survey shows that 23% of potential first-time homebuyers are waiting until after the election to make their purchase. That’s nearly a quarter of first-time buyers pressing pause, likely due to similar feelings of uncertainty.

Home Sales Rebound Post-Election

The good news is that these sales aren’t gone for good—they’re simply delayed. Historically, home sales have rebounded once the election is over. In fact, they’ve increased 82% of the time in the year following an election (see chart below):

This happens because, once the election concludes, buyers and sellers gain a clearer sense of the future and typically feel more confident making decisions, resulting in a surge in home sales.

Looking Ahead to 2025

If past trends are any guide, we can anticipate an increase in home sales next year. Current forecasts align with this expectation, projecting that the housing market will reach a total of 4.6 million sales this year, with next year’s total expected to climb to 5.2 million (see graph below):

This follows the usual pattern of post-election rebounds.

So, even though the market may seem to be slowing down at the moment, it’s more of a short-term pause than a lasting trend. As seen in previous election years, once the uncertainty fades, buyers and sellers are likely to re-enter the market.

Bottom Line

Keep in mind that while election years often lead to a brief slowdown in the housing market, this pause is generally temporary. Those delayed sales tend to pick up again. Historically, home sales often rise in the year following a Presidential election, and projections suggest 2025 will follow this trend. If you’re waiting for more certainty before making a move, rest assured that the market is expected to gain momentum in the coming months.