How The Election May Affect the Housing Industry
There are a handful of factors that impact mortgage rates. Most of them, ones you’d never think to consider. For example, the weather impacts rates; when natural disasters take place like a hurricane or earthquake, rates tend to decrease. More expected, generally speaking, when the employment situation and economy improve you can expect rates to increase. But what happens when there is a presidential election?
Well, look at it this way: the economy is intertwined with politics, and real estate is tightly connected to the economy. Presidents don’t set the mortgage rate, however, they do set the tone for the economy. When consumers feel confident about the economy, the housing market tends to fare well. When the political environment is unsteady it can lead to instability in the stock market which causes consumer confidence to drop, AKA a slower housing market…
This isn’t a “normal” election year by any means, as it coincides with a global pandemic. This being said, it’s hard to predict what the market will do. But, with reference to past election years and our reflection of what’s been occurring in the market during the COVID-19 situation, here is what we might expect the housing market to do…
The housing market might temporarily slow
Demand will remain, but consumer confidence can cause prospective buyers and sellers to put their plans on hold. Home sales tend to slow no matter what in the fall and winter, however during election years the decline becomes a bit more exaggerated. We’re assuming this is a result of the added caution from buyers. But this year is very different. Interest rates are historically low and the past few winters haven’t seen much of a decline in home buying and selling activity. If the market slows at all, this should only be temporary.
Home sales might see a boost the year following the election
Research has shown the year following the election tends to be the best for real estate. The buyers who were uncertain leading up to the election are now ready to jump in, as long as the economy stays on track. Even though this year’s election is anything but ordinary, we think the market will outperform our expectations.
Like we mentioned, this year altogether has been unpredictable. We understand it’s hard to feel confident in any choice at the moment, let alone a large financial decision like buying a home. However, remember that delaying plans could mean missing out on incredibly low interest rates and phenomenal affordability. If you have questions about determining if now is the right time for your home purchase, connect with a Cambria Mortgage professional: www.CambriaMortgage.com / 952-942-0110. Nothing is certain, especially in 2020, and locking in a low rate now can benefit you for years to come. Don’t wait, get started today!
Doering, C. (2020, June 18). Does the Presidential Election Affect Mortgage Rates? Retrieved October 09, 2020, from https://mygatormortgage.com/presidential-election-affect-on-mortgage-rates/
The KCM CrewWe believe every family should feel confident when buying & selling a home. KCM helps real estate professionals reach these families & enables the agent to simply & effectively explain a complex housing market. Take a 14-Day Free Trial of our. (n.d.). How Will the Next Recession Affect the Housing Market? Retrieved October 09, 2020, from https://www.keepingcurrentmatters.com/article/how-will-the-next-recession-affect-the-housing-market/
Ruiz, R. (2020, February 10). A Look at How Presidential Elections Impact Real Estate. Retrieved October 09, 2020, from https://www.meraki-realestate.com/a-look-at-how-presidential-elections-impact-real-estate/
Shelton, B. (2020, September 07). 2020 US Election: Impact on Real Estate Market. Retrieved October 09, 2020, from https://www.livewithplum.com/blog/impact-of-2020-us-election-on-real-estate-market?utm_campaign=35de9a75e4-EMAIL_CAMPAIGN_2020_05_06_12_39_COPY_01
Brafton Editorial, The Mortgage Reporter & The Truth About Mortgage.