Housing Market and Elections: Key Insights 💹🏡💲

We are going to review key insights for Metro Detroit regarding the Housing Market and Elections. Will it change home prices, sales, and mortgage rates? 

The Housing Market and Elections: Will We See a Shift

With the 2024 Presidential election coming up, you might wonder if it will affect your plans to buy or sell a home in Metro Detroit. This question is quite common because buying or selling a home is a major decision, and significant events like elections can influence the timing. Understanding the housing market can help you make informed choices if the housing market will be affected by elections. 

In the past, elections have been shown to influence people’s behavior in the real estate market, though these effects are often temporary and vary in intensity. How home sales, prices, and mortgage rates have historically reacted during election years.

CLICK PICTURE TO ENLARGE

Home Sales

During election years, especially in November, home sales tend to slow down a bit. Ali Wolf, Chief Economist at Zonda, says:

“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 slowdown happens because people feel unsure and may hold off on making big decisions. But don’t worry, this dip is temporary. Data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) show that after most Presidential elections, home sales go up the following year.

CLICK THE PICTURE TO ENLARGE GRAPH

Home Prices ~ Let’s Track

Do home prices drop during election years? Not really. Ryan Lundquist, a housing analyst, explains:

“An election year doesn’t alter the price trend that is already happening in the market.”

Macomb County Home Prices and Trends by City

Oakland County Home Prices and Trends by City

Home Prices and Presidential Elections | Team Tag IT Sold
TO ENLARGEGRAPH ~ CLICK PICTURE

Home prices usually keep going up year over year, regardless of elections. The NAR data shows that home prices increased the following year after seven of the last eight Presidential elections. The only time prices dropped in Metro Detroit was during the housing market crash of 2008, which was unusual.

Mortgage Rates

Mortgage rates are significant because they affect your monthly payments when you buy a home. Freddie Mac data shows that mortgage rates went down from July to November in eight of the last 11 Presidential election years. Experts think rates will go down a bit more this year, too. Those following my blog post, “Today’s Morgage Rates: What’s Affecting the Change,” know an election won’t affect mortgage rates; the Fed policies will. We know that Mortgage Rates follow Wall Street Bonds and Securities, unless inflation get under control we won’t see a significant drop in Mortgage Rates unless inflation drops. 

Interestingly, 2012 was the first time mortgage rates hit the 3.5% range. Unfortunetly, we’ve grown a custom to lower rates, but that’s not the norm. And mortgage rates under 3% were just a fluke caused by the Fed propping up the economy due to the pandemic. On 6-14-2020, the 10-year treasury yield was 0.0699, and the MBS Gap rate was 2.75% = mortgage rate of 2.82%. Fast forward to 6-17-2024, and the yield rate was 4.289%. The MBS Gap average rate was 2.75%, and the mortgage rate was 7.04%. That’s why mortgage rates drop. Remember, Wall Street determines mortgage rates, 10-year treasury yield + MBS Price Gap Rate = Mortgage Rate.

Mortgage Rates leading up to Presidential Election | Team Tag IT Sold
TO ENLARGE MORTGAGE RATES ~ CLICK PICTUTURE

What This Means for You

So, what does all this mean? Presidential elections can have some impact on the housing market, but they are usually small and temporary. Chief Economist at Bright MLS, Lisa Sturtevant, says:

 “Historically, the housing market doesn’t tend to look very different in presidential election years compared to other years.”

For most people, elections don’thave a significant effect on their plans to buy or sell a home.

Let’s Decode the Housing Market Together! Let’s Connect ⤵️

Wow 😮, there’s a lot to consider! Whether you’re looking to buy a new home or considering selling in Metro Detroit, keeping up with the latest housing market trends is essential. After all, these numbers impact your decisions. Let’s simplify the process together. Schedule a Zoom call with me, and we’ll review the data. I’ll share my screen so you can see the market insights clearly and feel confident about your next steps.

Final Thoughts

While it’s natural to feel a bit unsure during an election year, history shows the housing market in Metro Detroit stays solid and steady. If you’re considering buying or selling in Metro Detroit, staying informed and connected with the market trends is a good idea. So, don’t stress too much. Keep your plans on track, and reach out if you need any advice.

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Pam Sawyer with Metro Detroit Home Experts | Team Tag It Sold

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Housing Market and Elections: Key Insights 💹🏡💲
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Housing Market and Elections: Key Insights 💹🏡💲
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We'll explore if the housing market will be affected by the elections in Metro Detroit. We'll review Prices, Sales, and Mortgage Rates.🏡💲
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Metro Detroit Home Experts | Team Tag It Sold
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Real Estate Insider: News You Can Use | Team Tag It Sold
Real Estate Insider 🏡🎯
Stay ahead in the real estate journey with insights that matter. Our newsletter is all about helping you save when buying and earn more when selling. Provide your email and text #, and we’ll deliver the knowledge you need. 👇👇👇
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