With the 2024 Presidential election just a few months away, I’ve heard more rumblings from potential sellers than I have in quite time. Given persistent high mortgage rates and low inventory, many sellers are hesitant to put their home on the market for two reasons.
- Buyers may not come to the table given the increased value.
- Sellers don't know where would they move locally after they sold their home?
These questions, in combination with an upcoming election, have created somewhat of a conundrum for many sellers…and buyers.
Selling your home is no small decision. It’s natural to wonder what the upcoming election may do to the market and your options to sell.
Historically, in Southern California, elections have always had a small, temporary impact on the local market.
Home Sales
During the month of November of a Presidential election year, there is typically a slowdown in home sales nationally as well as Southern California. As Ali Wolf, Chief Economist of Zonda said:
“Usually, home sales are unchanged compared to a non-election year with the exception being November. In an election year, November is slower than normal.”
This is mostly due to the fact that buyers and sellers feel a bit uncertain about the future and hesitate on making big decisions right before an election. Right after the election however, home sales nationally rebound and continue to rise the following year. Take a look at this Graph:
So if you’re worried about your home losing value because of an election, especially given today’s inflation trends and forecasted interest rate cuts, you can rest easy knowing the chance of your home losing value in November this year is slim and that it will rise even more after the election.
So What About Mortgage Rates?
With a look at the past 11 Presidential election years, you can see that mortgage rates generally decrease (at least 8 out of the last 11 elections). As of July 2024, all indications point to a Fed rate cut in September, just in time for the election.
If a rate cut happens in September and October as most predict, you can almost bet that more buyers will jump off the fence and look to take advantage of lower interest rates.
The Bottom Line
It’s natural to feel a bit uncertain during the months of July-November of a Presidential election year. History shows the market in Southern California and Nationally that the housing market is strong. And if there is any impact on the market will be minimal and temporary.
