On 5 November 2024, American voters will cast their ballots for who they want to be the next U.S. president, and the winning candidate will take office the following January. <\/p>\n\n\n\n
Current<\/a> polls show<\/a> the final match-up will be between current President Biden and former President Trump. The election result could have a major impact on the real estate market, so investors would do well to follow the election closely. <\/p>\n\n\n\n In this article, we\u2019ll go over some of the historical, economic, and policy factors at stake, so you can know what to expect next November and make more informed investing decisions along the way. Let\u2019s get started!<\/p>\n\n\n\n Depending on your political beliefs, the next president could help or hurt the economy.<\/p><\/blockquote>\n\n\n\n Presidential election years dampen property sales, appreciation<\/strong><\/p>\n\n\n\n Historically, home sales have slowed down in election years. This is because the prospect of a new president tends to create uncertainty about the future economy<\/a>, and homebuyers become more cautious as a result. <\/p>\n\n\n\n \u201cWhy [presidential elections] affect the market more than any other elections is simply because people fear change,\u201d Matt Laricy, managing broker of The Matt Laricy Group in Chicago, told Forbes<\/a>. \u201cWhenever people get nervous, they don’t make rational decisions. They make emotional decisions.\u201d<\/p>\n\n\n\n The tighter the presidential race, the higher the anxiety among buyers. For example, the contest between Biden<\/a> and Trump<\/a> is relatively close at the moment. If it remains so, we can expect home sales to dip, especially in the months right before November. However, if a single candidate emerges as the probable winner, there may be less noticeable change in real estate transactions, leading to \u201cbusiness as usual.\u201d<\/p>\n\n\n\n As it stands, consumer confidence metrics<\/a> show Americans are increasingly skeptical about our economic future (and real estate by extension).<\/p>\n\n\n\n Of course, buyers don\u2019t duck out of the real estate game forever. Typically, they just defer buying a home until after the election, when they know who will be directing the country\u2019s economy for the next four years. Consequently, it\u2019s common to see a sudden spike in home sales immediately after the election from all the pent-up demand.<\/p>\n\n\n\n Keep in mind that a drop in property sales may also have an impact on the appreciation of real estate you already own. A study<\/a> by Movoto, for example, shows that, on average, your house will appreciate by 4.5% in an election year compared to 6% the year before and 5.3% the year after.<\/p>\n\n\n\n It\u2019s no secret that the current real estate market is in crisis.<\/p><\/blockquote>\n\n\n\n Presidents\u2019 impact on economic growth, inflation risk, and interest rates<\/strong><\/p>\n\n\n\n Another way the upcoming 2024 election could impact real estate is the candidates\u2019 proposed economic policies. For example, Republicans tend to favor lower taxes, deregulation, fiscal conservatism, and free trade, while Democrats tend to favor progressive taxation, regulation, social safety nets, and increased labor rights.<\/p>\n\n\n\n Depending on your political beliefs, the next president could help or hurt the economy. Economic growth could boost Americans\u2019 financial situations and thereby increase housing demand and prices. However, it could also lead to higher inflation, pressuring the Federal Reserve to raise interest rates to curb it (as it has done over the past year and a half<\/a>). <\/p>\n\n\n\n The Federal Reserve is an independent U.S. government entity that sets the Federal Funds Rate, the benchmark for all other interest rates, including mortgage rates<\/a>. Recently, the Fed indicated<\/a> that a few more rate hikes could be ahead, followed by a sustained period of higher interest levels. If mortgage rates continue rising<\/a>, the cost of housing will also increase, dampening buyer demand. <\/p>\n\n\n\n Other economic policies that could impact housing demand include student loan forgiveness and foreign wars and sanctions. For example, Biden has canceled $127 billion in student debt for nearly 3.6 million people<\/a> despite the Supreme Court blocking his controversial student loan forgiveness program. If this continues, it will increase the discretionary spending power of those forgiven, pumping more money into the economy and putting upward pressure on inflation. <\/p>\n\n\n\n Similarly, the recent Israel-Hamas war threatens to disrupt the oil market<\/a>. Since the U.S. depends heavily on foreign oil, this could have widespread implications for the country\u2019s economy, including real estate. If, for example, oil supply drops and prices go up, Americans will have less money to spend on other goods, which could trigger an economic downturn.<\/p>\n\n\n\n Of course, the state of the economy doesn\u2019t rest solely on the president, but voters still look to the president to address their economic concerns and drive growth.<\/p><\/blockquote>\n\n\n\n Housing policy on track to becoming a key voting issue <\/strong><\/p>\n\n\n\n It\u2019s no secret that the current real estate market is in crisis. Housing affordability is the worst it\u2019s been since 1985<\/a>, and the average 30-year fixed mortgage rate hit 8% for the first time since 2000<\/a>. Needless to say, the housing market is on many voters\u2019 minds and will be a hot voting issue come November 2024. Presidential candidates will need to win over Americans with their proposed housing solutions. <\/p>\n\n\n\n