Now that Halloween is beyond us, it’s time for the next scariest time of the year — the Presidential Election!

You may be wondering how, if at all, it's affecting the housing market. Let's take a closer look!

The Presidential Election ‘Bounce Back Effect‘

Each year, home sales naturally ease up a bit in the fall but during an election year, the slowdown tends to be a bit more pronounced. This year, nearly 23% of first-time buyers are hitting pause until after the election, likely waiting for a clearer view of what’s ahead.

Historical Market Responses:

Home Sales: Home sales typically rebound quickly. With the political uncertainties in the rearview, both buyers and sellers regain confidence, fueling a more active market. Data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) show that home sales increased the year following 9 of the past 11 presidential elections — a trend consistently observed since the early 1990s.

Home Prices: According to NAR, home prices have risen 88% of the time in the year following an election. The only year prices declined was during the housing market crash of 2008, which was far from a typical year. Nationally, home prices are predicted to continue to increase in 2025.

Mortgage Rates: Freddie Mac data indicates that mortgage rates typically dropped between July and November in 8 of the last 11 presidential election years. While this year hasn’t followed that trend, most experts still expect a gradual decrease by year’s end.

Ralph’s Take

Presidential elections bring a brief, minor slowdown to the housing market. While they can prompt a short-term pause, those sales aren’t lost. Home sales generally rise the following year and 2025 is expected to follow suit. For those waiting for a clearer outlook, keep in mind that mortgage rates ultimately having a greater impact on the market than election results.

Are Townhouses the New American Dream?

While rising interest rates and higher home prices have created additional barriers to homeownership, the primary issue remains a shortage of homes. In response, developers are ramping up construction, with national single-family home building spiking by 16% in September. What if the answer isn’t simply building more homes, but building smaller, more efficient ones? Enter the townhouse — a growing trend that may just be the new American dream, according to Realtor.com. Additional reasons townhouse demand is on the rise:

• Affordability

  Townhouses are generally more affordable than single-family homes.

• Lower Maintenance

  Many townhouses offer reduced maintenance, with HOA services that handle exterior upkeep and landscaping.

• Lower Utility Costs

  Shared walls and compact designs make townhouses more energy-efficient, which reduces heating and cooling costs for eco-conscious buyers.

• Community

  Townhouse communities foster a sense of neighborhood through shared spaces and amenities.

• Lower Taxes

  Townhouses often come with lower property taxes, particularly if they are condominiums. The difference stems from the way various property types are assessed. *More on assessments in a future newsletter.

Ralph’s Take

Townhouses offer a versatile option for a range of buyers. For first-time homebuyers, they provide an accessible entry into the housing market without the steep costs often linked to single-family homes. For repeat buyers, townhouses deliver the benefits of ownership with reduced maintenance, making them attractive for those who want to own property while avoiding a large mortgage or intensive upkeep.