Could the Housing Market See a Bump After the 2024 Presidential Election?

As we approach the 2024 presidential election, there’s growing speculation about its potential impact on the housing market. Historically, the year following a presidential election often sees an increase in home prices and the number of homes sold. This trend, combined with current economic factors, might signal a post-election bump in the housing market.

Interest Rates and Buyer Sentiment

Interest rates are a critical factor influencing the housing market. Recently, we've seen a slight decrease in the 30-year mortgage rate, even without any direct action from the Federal Reserve. Experts believe that if the Fed cuts rates, we could see mortgage rates drop to around 6.25% by the end of the year. This potential rate reduction could encourage more buyers to enter the market, making it an ideal time for those looking to purchase their first home.

The Inventory Challenge

Despite the possibility of lower interest rates, the housing market faces a significant challenge: inventory. Currently, many homes are sitting on the market for extended periods—some over 180 days—without selling. This is partly because homeowners with existing mortgages at lower rates, such as 3.5%, are reluctant to sell and take on new, higher-rate mortgages. This stagnation has led to an increase in available inventory, but it hasn't necessarily translated into more sales.

Pricing Adjustments

With high home prices and expensive mortgage rates, affordability remains a significant concern for buyers. Although we're not witnessing drastic price cuts, some sellers are beginning to adjust their asking prices, particularly in markets where homes are sitting unsold for long periods. Buyers are increasingly negotiating deals at 10% to 20% below the asking price. This trend suggests that while home prices may not plummet, there could be opportunities for savvy buyers to find more favorable deals.

Timing the Market

For potential buyers, timing is crucial. The period leading up to and following the 2024 presidential election could present a unique window of opportunity. If interest rates continue to fall and sellers become more willing to negotiate, the post-election market could be favorable for those ready to make a move. However, any potential market bump may be short-lived, so buyers will need to act quickly to capitalize on these conditions.

In conclusion, while the housing market is influenced by a complex interplay of factors, the 2024 presidential election could usher in a period of increased activity. Lower interest rates, adjusted pricing, and strategic timing could all contribute to a post-election bump, offering a window of opportunity for buyers in the right position to take advantage.