Red, White, and Real Estate: The Housing Market During the 2024 Election Year

It’s that time again, the housing market has entered an election year. With the US presidential election on its way in November 2024, homeowners, investors and economists are eager to predict what impact it will have. And some are nervous.  

A recent Investopedia survey found over half (61%) of investors say they're worried about the 2024 U.S. presidential election affecting their portfolios. But should they be? Are elections really bad news for the housing market? 

The truth is no one can ever know for sure. All markets are sensitive to change, so while the election does factor into this, there’s a lot more at play. 

What affects housing prices during an election year?

While we often talk about the real estate market, supply and demand has the greatest impact on the price of housing. This will of course vary between states and local neighborhoods, so some areas can boom when others bust. 

Investopedia lists the four major factors that drive the real estate market:

1. Demographics such as population age, growth, and migration 
2. Interest rates and the impact they have on purchasing power
3. The health of the economy such as stability, employment, inflation, the cost of living
4. Government policies, tax incentives and subsidies 

When uncertainty hangs over any of these factors, the real estate market tends to stall. Both supply and demand drop if people feel less confident about making moves to buy and sell property. It’s the wait-and-see approach that spooks the market. In an election year, people often want to hold off in case interest rates change or a new government changes housing or tax policies.

But there are much bigger macroeconomic factors at play than the 2024 US election. The economy has faced headwinds, high inflation and speculation of recession. Then there’s the increase in natural disasters and war. All this impacts consumer confidence and the housing market.  

What’s more likely to influence the markets this year is the cost of lending. After so many increases, mortgage rates dropping would likely have a bigger impact on housing activity than who sits in office. 

How has the housing market performed during past elections? 

As one realtor.com article notes, most elections cause more of a ‘blip’ on the housing market than major meltdowns. The uncertainty peaks around November, causing sales to slow down compared to non-election years. But this is usually resolved by December when activity resumes. 

It’s the other factors mentioned earlier that have a bigger impact. For example, 2008 was an election year but that coincided with the global financial crisis. 2020 was an election year, but pandemic-lead demographic changes and record-low interest rates was what drove housing prices and activity. 

Investopedia also looked at historical data around investment performance and found that the S&P 500 recorded positive returns in 20 of the last 24 election years.

How is the housing market performing in 2024 so far?

Housing affordability remains a problem in 2024, with both interest rates and home prices stubbornly high. Real estate analysts at Redfin noted that the year is off to a sluggish start. Home prices are increasing and mortgage rates have stopped falling. 

But they also note that there are plenty of real estate investors still hungry for lower-priced homes and searching for bargains. Redfin’s analysis found that investors bought more than a quarter (26%) of the county’s most affordable homes in the last quarter of 2023, the highest recorded in the last two decades. 

How Belong brings stability to rental homeowners

Don’t sweat the election year. If you’re looking for a long-term solution and stability in your rental experience, Belong has you covered. We’re making rental finances predictable by offering stable, guaranteed rent. We’re providing flexible payment options to keep your cash flow steady. And we’re doing it while providing a better way of living for the millions of Americans who rent. 

Working together, we can put people first and change what it means to rent a home. Belong can help you reach your financial goals, while also creating lasting, positive impact on innumerable lives for decades to come.

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