Why Home Sales Bounce Back After Presidential Elections
With the 2024 Presidential election fast approaching, you might be wondering what impact, if any, it’s having on the housing market. Let’s break it down.Election Years Bring a Temporary SlowdownIn any given year, home sales slow down slightly in the fall. It’s a typical, seasonal trend. However, according to data from BTIG, in election years there’s usually a slightly larger dip in home sales in the month leading up to Election Day (see graph below):Why? Uncertainty. Many consumers hold off on making major decisions or purchases while they wait to see how the election will play out. It’s a pattern that’s shown up time and time again, and it's particularly apparent for buyers and sellers in the housing market.This year is no different. A recent survey from Redfin found that 23% of potential first-time homebuyers said they’re waiting until after the election to buy. That’s nearly a quarter of first-time buyers hitting the pause button, likely due to the same feelings of uncertainty.Home Sales Bounce Back After the ElectionThe good news is these delayed sales aren’t lost forever—they’re just postponed. History shows sales tend to rebound after the election is over. In fact, home sales have actually increased 82% of the time in the year after the election (see chart below):That’s because once the election dust settles, buyers and sellers have a sense of what’s ahead and generally feel more confident moving forward with their decisions. And that leads to a boost in home sales.What To Expect in 2025If history is any indicator, that means more homes will sell next year. And based on the latest forecasts, that’s exactly what you should expect. As the graph below shows, the housing market is on pace to sell a total of 4.6 million homes this year, and projections are for 5.2 million total sales next year (see graph below):And that aligns with the typical pattern of post-election rebounds.So, while it might feel like the market is slowing down right now, it’s more of a temporary dip rather than a long-term trend. As has been the case before, once the election uncertainty passes, buyers and sellers will return to the market.Bottom LineIt's important to remember that while election years often bring a short-term slowdown in the housing market, the pause is usually temporary. Those sales are not lost. Data shows home sales typically increase the year after a Presidential election, and current forecasts indicate 2025 will be no different. If you’re waiting for a clearer picture before making a move, just know that the market is expected to pick up speed in the months ahead.
Why Your House Will Shine in Today’s Market
Even though there are more homes available for sale than there were at this time last year, there are still more buyers than there are houses to choose from. So, know that if you’ve got moving on your mind, your house can really stand out.There are several key reasons why there aren’t enough homes to go around and understanding them will help you see why the market is working in your favor if you’re ready to make a move.What’s Causing the Shortage?1. Underproduction of Homes: For years, the industry hasn’t built enough homes to keep up with demand. As Zillow explains:“In 2022, 1.4 million homes were built — at the time, the best year for home construction since the early stages of the Great Recession. However, the number of U.S. families increased by 1.8 million that year, meaning the country did not even build enough to make a place for the new families, let alone begin chipping away at the deficit that has hampered housing affordability for more than a decade.”2. Rising Costs: Building materials, labor shortages, and supply chain disruptions caused by the pandemic have all made it harder and more expensive to build homes. This can either limit or stop new home construction in some areas.3. Regional Imbalances: Some markets are more affected by the shortage of homes than others. Popular and more desirable areas have more people moving in faster than new homes can be built. The number of new building permits issued doesn’t always keep pace with job growth in these regions, and that leads to even tighter markets and higher prices.How Big Is the Problem?According to estimates from Real Estate News, the U.S. is facing a housing shortfall of roughly 3.3 million homes, based on an average of several expert insights (see graph below):This shows there’s a significant number of homes that need to be built just to meet current demand from buyers. But what about future demand?According to John Burns Research and Consulting (JBREC), over the next 10 years, the U.S. will need about 18 million new homes to meet projected demand, including homes for new households, second homes, and replacements for aging or unusable homes.So, even though more homes are on the market compared to last year, there still aren’t enough of them to go around. This is where you can really win if you’re ready to sell your house.What You Need To RememberIf you’re thinking about selling, the shortage of homes for sale means your house is likely to get some serious attention from buyers. It’ll take years to climb out of this inventory deficit, and the market is still very tight. So, when buyers are competing for relatively few homes like they are right now, that creates more interest in the houses that are on the market, putting upward pressure on prices and ultimately working in your favor.And since every market is different, it’s important to work with a real estate agent who understands local trends. They can help you price your house right and create a strategy to attract the right buyers.Bottom LineWhile there are more homes for sale than there were at this time last year, there’s still a shortage overall. And this puts you in the driver’s seat as a seller. Reach out to a trusted real estate agent who can help you take advantage of today’s market.
Debunking Scary Myths About Buying a Home
Some HighlightsThere are a number of scary myths about homebuying in today’s market. Here’s what you need to know.Prices are not expected to crash, it is possible to buy even with student loan debt, and there are programs that can help you save for a down payment.Don’t let scary myths delay your homebuying plans. Connect with an agent so you have a pro to help you separate the facts from your fears.
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