As November approaches, many homeowners, buyers, and investors ask: Does an election year affect the housing market?

Let’s explore how election cycles influence real estate activity and what this means for you. One of the ways elections can affect the real estate market is through uncertainty.

During an election year, consumers often face unclear prospects about future government policies, or at least conjecture about what we think will happen depending on who is elected. This uncertainty can slow the market, as many individuals sit on the sidelines for more stable conditions. Decisions around taxes, interest rates, and housing regulations are typically central campaign issues and until the new administration’s policies are clarified, it’s common for some buyers and sellers to wait it

out.

As a result, you might notice a slowdown in transaction volume, and days on the market (DOM) increasing, particularly in the months leading up to Election Day. However, this effect is typically short-term, with market activity picking up once a clear direction is established.

According to Bankrate, home price increases have outpaced nonelection

years 8 out of the last 9 elections with 2008 being the only one that didn’t due to the housing crisis which had nothing to do with the Obama/McCain race other than coincidental timing.

For homebuyers, this means the cost of borrowing could change, potentially making a home purchase affordable. On the other hand, sellers may see an adjustment in the demand for homes based on fluctuating interest rates. This is true regardless of the election year. Steve Schutt of Movement Mortgage had this to say about rates.

“The rates are determined by the market, which the Fed Res tries to keep stable, but there’s no consistency between different administration policies and rates because it takes so long to move the momentum one way or another.”

Tax policies are a hot topic during election years, and any changes can directly impact real estate. Policies concerning capital gains taxes, property taxes, or deductions for mortgage interest all factor into investment decisions. For example, if a new administration promises changes that favor real estate investors (such as enhanced deductions or tax breaks), it may spur more activity in the market.

Conversely, tax increases or changes that limit homeowner benefits could dampen investment, especially for higher-end properties where capital gains taxes are a more significant concern.

Both homeowners and investors need to stay informed about

potential changes to tax laws during an election year.

The overall economic confidence tied to an election’s outcome also shapes the housing market. If the election results are perceived to encourage economic growth and stability, consumer confidence often rises, leading to more home purchases. People feel more secure in their financial future and are more willing to make significant investments, like buying a home.

On the flip side, uncertainty or fear about the future economy under a new administration can cause hesitation. A cautious market can result in slower transaction rates as people wait to see how the economy will respond to the new leadership.

Whether the president-elect’s policies will help the housing market or not, the perceived consumer confidence can impact before any policy has even taken place.

Election results can lead to new housing initiatives or regulations that impact the supply and demand of homes. Different administrations often have varying approaches to affordable housing, rent control, and homeownership programs. Policies promoting homeownership can increase demand, while regulatory changes could affect everything from building permits to rental market regulations. An example would be

President Barack Obama’s Blueprint for an America Built to Last, where policy allowed for homeowners who were current on their payments an easier path to refinancing, taking advantage of low interest rates.

The Clinton Administration initiated the National Homeownership Strategy by directing Fannie Mae and Freddy Mac, GSEs (Government-Sponsored Enterprises), by increasing funds and making funds more available by reducing their lending standards. Bush also contributed by signing the American Dream Downpayment Act. If you are in the real estate market during an election year, timing and strategy are key.

Consumers should be patient during periods of uncertainty or to take advantage of favorable policies once the election has passed.

Whether buying or selling, it’s essential to stay informed about potential policy changes that could impact your transaction.

While the housing market can experience volatility during an election year, history shows that these effects are typically temporary. So, let’s all take a breath together. The fundamentals of real estate—location, supply and demand, and economic conditions—remain the primary drivers of long-term market trends. If you’re considering

buying or selling a home, there’s potentially no reason to let campaign season change your plans.

For most Americans, the election outcome will likely have little direct effect on their income — therefore, you can safely ignore national politics while making your real estate decision.

The contents of this article are for informational purposes only. The content is not intended to be a substitute for professional real estate advice.

About John Sallman

John Sallman is the Broker/Owner of Salt and Light Realty and a regular contributor to Midbaynews.com. In addition to serving others as a realtor in the Niceville and Valparaiso areas, Sallman is a world-class chef with more than a decade of experience in the finest restaurants along the Emerald Coast. 

Sallman, a Niceville resident since childhood, has experience in all types of real estate transactions. His brokerage specializes in sales and property management. reach out to him today at John@saltandlightrealty.com.