Why Home Sales Bounce Back After Presidential Elections

Why Home Sales Bounce Back After Presidential Elections

With the 2024 Presidential election approaching, you may be curious about its potential impact on the housing market. Let’s break it down.

Election Years Bring a Temporary Slowdown

In any given year, home sales tend to slow down a bit in the fall due to seasonal trends. However, data from BTIG indicates that in election years, there is typically a slightly larger decline in home sales in the month leading up to Election Day (see graph below):

Why does this happen? Uncertainty. Many consumers hesitate to make significant decisions or purchases while they wait to see how the election unfolds. This pattern has emerged repeatedly, particularly among buyers and sellers in the housing market.

This year is no exception. A recent survey from Redfin found that 23% of potential first-time homebuyers indicated they’re waiting until after the election to buy. That’s nearly a quarter of first-time buyers putting their plans on hold, likely due to similar feelings of uncertainty.

Home Sales Bounce Back After the Election

The good news is that these delayed sales aren’t lost forever—they’re merely postponed. History shows that sales typically rebound after the election concludes. In fact, home sales have increased 82% of the time in the year following an election (see chart below):

That’s because once the election dust settles, buyers and sellers gain clarity about what lies ahead and generally feel more confident in moving forward with their decisions. This increased confidence often results in a boost in home sales.

What To Expect in 2025

If history serves as an indicator, this suggests that more homes will sell next year. Based on the latest forecasts, that’s precisely what you can expect. As the graph below illustrates, the housing market is on track to sell a total of 4.6 million homes this year, with projections indicating 5.2 million total sales next year (see graph below):

This aligns with the typical pattern of post-election rebounds.

So, while it may seem like the market is slowing down right now, it's more of a temporary dip rather than a long-term trend. As has been observed in the past, once the election uncertainty subsides, buyers and sellers will return to the market.

Bottom Line

It’s important to remember that while election years often lead to a short-term slowdown in the housing market, this pause is usually temporary. Those sales are not lost. Data shows that home sales typically increase in the year following a Presidential election, and current forecasts suggest that 2025 will be no exception. If you’re waiting for a clearer picture before making a move, rest assured that the market is expected to gain momentum in the months ahead.