As the presidential election gains momentum, debates over housing affordability, mortgage rates, and grants for first-time homebuyers are taking center stage. But how does an election season truly impact the housing market? The data presents a mixed picture.
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According to a study by John Burns Research and Consulting, annual seasonal declines in home sales aren’t more significant during election years than in other years. Over a 35-year comparison, data shows that new home sales fall by about 10% on average in election years, compared to a 14% drop in non-election years.
However, while mortgage rates usually fluctuate due to broader economic conditions, the election adds an element of short-term uncertainty. For instance, a Redfin report found that 22% of potential homebuyers delay selling due to the election.
Both candidates have expressed their housing plans. Harris has pledged to expand the low-income housing tax credit, offer $25,000 in down-payment assistance for first-time buyers, and increase housing construction. Trump, on the other hand, has promised to reduce regulations and open portions of federal land for large-scale housing projects.
According to data from the U.S. Census Bureau and U.S. Department of Housing and Urban Development, housing affordability remains a persistent concern, and lenders are closely watching to see how the next presidency will affect the market.
Mortgage Professional America (MPA) sought insights from mortgage experts across the country to understand how the upcoming election might shift the sector and how originators can prepare for possible challenges in 2025.
Will the election impact the U.S. mortgage market? Here’s what experts are saying:
Koorosh Farzad, founder of Masihi Financial Group:
"Post-election periods often bring uncertainty, which can push rates up. People may hesitate to make new investments. No matter who wins, some level of uncertainty will linger. If Harris wins, I believe uncertainty will persist longer, keeping rates high. With Trump, I think any uncertainty will be shorter-lived, potentially leading to lower rates and stimulating economic growth. Interestingly, most people assume the opposite—that Harris would bring more certainty and Trump more unpredictability—but I see it differently."
Crista Lowrie, VP at First Citizens Community Bank:
"I believe the election does affect the market. Historically, some years have seen better conditions with lower rates. Right now, inflation is a major issue, but income isn’t keeping up with rising home prices. Baby boomers, the largest group of homeowners, aren’t selling because they have few options. Affordable housing is in short supply, and we may see change based on who’s elected."
Jonathan Fowler, VP of Business Development at American Financial Network:
"Many consumers are wary of potential changes in laws, Federal Reserve policies, and immigration. But real estate in this country is resilient, and the U.S. always bounces back. Population growth, including legal immigration, means we’re millions of homes short. We have generations living under the same roof, increasing demand for housing."
Jon Overfelt, Owner of American Security Mortgage:
"There is a bit of a slowdown as people wait to see what direction the election will take us. Afterward, it might lead to slight changes in mortgage regulation, but demand for housing remains strong, and consumers will adapt."
Dale Vermillion, Founder of Mortgage Champions:
"I do believe presidential elections impact housing. Policy positions on housing, inflation, and regulation vary widely by party and can significantly affect market conditions. Views on government-sponsored enterprises (GSEs) also differ, making the choice of president impactful."
Christian J. Plocica, Chief Operating Officer at VIP Mortgage Group:
"I’d say ‘yes’ and ‘no.’ Right now, high rates driven by inflation are challenging the mortgage industry. To control inflation, rates are raised, limiting economic growth. If the next president can address inflation effectively, lower rates and increased mortgage activity could follow. The industry needs relief."
The question remains whether the election will significantly influence the housing market in the long term or if its effects will be more immediate and temporary.
