In recent months, real estate agents across the country have heard a familiar refrain from prospective homebuyers hesitant to pull the trigger: I’m waiting for the election.
Nationally, sales of existing homes dropped to a 14-year low in September, despite mortgage rates touching a two-year low that month, according to the National Association of Realtors®.
“Homebuying is clearly a major decision, and we know the country has been in a polarized state,” NAR Chief Economist Lawrence Yun said last month. “Maybe people have been waiting to see what the result of the election will be before making a major decision, like homebuying or home-selling decisions.”
Historically, there’s little evidence that home sales or prices drop in the run-up to presidential elections, according to an analysis of NAR sales data by the Realtor.com economics team.
Over the past five elections (2004–20), a year-over-year slowdown in home sales occurred in the four months prior to just two elections: 2004 and 2016. Slowing price growth was observed before only two of the elections, in 2004 and 2008.
However, there is more evidence for a post-election bump. Home sales and prices have increased annually in the four months following each election since 2004, with the exception of 2008, when the Great Recession threw the housing market into crisis.
Those gains have also been bigger than the period immediately before the election in all election years except 2008. In some cases, like 2012, the improvement was fairly marginal, but in years like 2016 and 2020, the rebound was much sharper.
On average, home sales jumped 7% annually in the four months following the past five presidential elections, while prices rose an average of 5%.
Still, economists say that factors such as mortgage rates and the strength of the economy are the main factors driving homebuyer behavior, with fears over election outcomes likely playing a much smaller role.
“The idea that pre-election uncertainty stops many homebuyers and sellers from moving forward is one that we hear anecdotally from agents and others in the real estate industry,” says Realtor.com Chief Economist Danielle Hale.
“While it is undoubtedly true that some buyers and sellers will point to the election when asked why they are not moving, historical data put a question mark on the extent to which this effect slows home sales and prices in the period immediately before the election,” she adds. “The data is far more supportive of a pickup in sales and price growth after the election.”