I wanted to look at home sales, new/existing home prices, and mortgage rates after presidential elections in the past.
During all the elections that I have been alive, it seems there is always some crises, drama, and financial doom looming and it always comes down to politics at the end of the day. Leaving politics aside because let’s be honest, we always hear, we are going to build more housing, make housing more affordable, focus on first-time home buyers and every presidential candidate that wants to get elected is going to fix housing.
Past/Present/future of housing
How has housing done after a NEW president is elected in the past and what is the outlook for the next 4 to 5 years. Today we are facing higher rates, low inventory, affordability at all time lows, housing values are super high and everyone is waiting on the FEDs to actually cut rates after two years of raising them very quickly. On top of this, the government injected $9 to $10 Trillion into the economy over the last 4 years due to the pandemic so we are living in some very interesting times.
Home sales went up after the last 9 of the 11 elections. The future forecast for housing looks to be on the same track; with low inventory, rates coming down, demand will pick up, sales seem to be increasing YOY after coming off the lowest sales recorded in history in 21/22.
HOME SALES
Existing home prices went up 7 out of the last 8 elections. This trend based on data and outlook seems to be the same and prices will continue to go up in most markets. Some markets that were over-bought like Austin, certain parts of FL, and certain parts of ID to name a few could experience some pain and price corrections, but let’s be honest some of the markets increased so high and so fast so a correction is healthy. Overall with the lack of inventory, rates coming down, demand picking up, and the lock-in effect of low rates of current homeowners, it is the perfect storm for values to keep going up due to simple supply and demand.
New homes sales up the last 10 out of 11 elections. To piggyback on existing sales, this trend will continue as well and values on new homes will go up as well over the next 4 to 5 years.. The advantage builders have it they have a new product, the ability to control supply with releasing units slower and buy down interest rates to the 4/5% makes their model very attractive to new home buyers.
NEW HOME SALES
Mortgage rates have gone down the leading up to the 8 of 11 elections and this election will be the same as rates are coming down from a high point. Rates will continue to drop as the economy softens, the Feds start to cut rates and inflation/jobs market show signs of easing. This will help affordability; buyers demand and millions savings money by refinances and lowering rates/payments.
MORTGAGE RATE PROJECTIONS
Based on previous elections and data it seems we will continue trend. War, recession, or some other BIG crises/event could change how housing and economy do moving forward and we will always watch data and keep you informed.
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