How the 2024 U.S. Election Affects Real Estate
- 12 November 2024
- Munif Ali
With the conclusion of the 2024 U.S. election, housing markets throughout the country are adjusting to the ripple effects of the newly elected administration’s policies. In cities like Washington, D.C., where federal ties are strong, changes in government jobs and regulations often impact housing demand. Areas with many government contractors or federal employees may see short-term shifts as residents react to job or policy changes.
While election cycles may briefly slow the real estate market, long-term trends are shaped by economic factors like mortgage rates, tax policies, and housing initiatives, which have a greater impact on buyer confidence and market stability. If the new administration prioritizes infrastructure, affordable housing, or climate policies, you might see specific shifts that affect your decisions directly. For example, if affordable housing gains focus, you could have more options at lower price points, making it easier to buy or, as an agent, opening up new markets to serve. This article explores how the 2024 U.S. election and its aftermath may impact real estate markets across the country.
Policy and Tax Implications of a New Administration
The U.S. elections offer a chance to adopt changes, especially in tax, housing subsidies, and regulation issues. For example, an administration of this type may propose a revision of the following:
- Mortgage Interest Deductions: Policies regarding mortgage interest deductions affect affordability and demand. A smaller decline in the deductions may slightly reduce demand, whereas an incentive increase could encourage more purchases.
- Capital Gains Tax: Changes in capital gains tax rates can affect decisions about buying, selling, or holding property. If capital gains taxes are heightened, property owners may hesitate to sell because higher taxes on profits make them less profitable.
- Incentives for First-Time Buyers: Many candidates propose new measures to support first-time buyers, and such policies can increase demand in certain markets.
Real estate decisions and shifts of orientations are now viewed as functions and determinants of elections. Nearly 66% of the American voters stepped in that day to cast their ballots in 2024. According to Foreign Policy, the voter turnout was highest in states with those problems in the housing affordability issue. This heightened engagement reflects how closely buyers and investors track the U.S. election results to anticipate shifts in mortgage rates, property taxes, and economic policies directly impacting real estate choices.
Regional Impacts: Variations Across the Country
U.S. elections can significantly impact regional real estate markets, especially in areas where local economies are closely tied to federal employment or government-dependent industries. In Los Angeles, election years often bring slight shifts in housing demand and development as prospective buyers, sellers, and investors await potential changes to property taxes, rent control, and zoning laws. These shifts may delay certain transactions as stakeholders gauge how new leaders might impact the local housing market and development incentives. However, Los Angeles real estate tends to stabilize post-election, as the city’s sustained housing demand—fueled by its large population and economic diversity—continues to support a resilient market.
Research indicates that election cycles tend to bring slight downturns in market activity as uncertainty influences consumer confidence, though this effect is often temporary. Data from Realtor.com shows that in previous election years, price appreciation slowed slightly in D.C. and other government-heavy areas, as buyers hesitated to commit until after the results and potential policy implications became clear. For example, the 2020 election saw this effect, although home prices and demand ultimately continued to rise due to D.C.’s high housing demand and limited inventory.
In addition, regions with strong economic connections to federally regulated industries—such as energy in Texas or healthcare in Florida—can experience more pronounced real estate market impacts depending on the policies advanced by the winning party. For instance, areas in Texas reliant on the oil and gas sector may see notable fluctuations in real estate demand if new energy regulations either support or constrain local job markets. Similarly, in regions heavily invested in healthcare infrastructure, like parts of Florida, real estate dynamics can be shaped by policy shifts around healthcare funding, insurance, and hospital regulations, influencing both commercial and residential markets.
The Balancing Act of Real Estate and U.S. Elections
While the U.S. Election affects real estate in various ways, most market adjustments are temporary, and the market stabilizes as the economy absorbs policy changes.Â
Understanding how U.S. elections impact the real estate market is essential for navigating market shifts.Â
Gain valuable insights by watching our video on “US Election 2024: What It Means for Real Estate?” and learn how political outcomes can reshape property trends.
Key Takeaways
- The U.S. Election often brings uncertainty, causing buyers and sellers to delay transactions. This wait-and-see approach can lead to temporary stabilization or even slight dips in real estate prices.
- New administrations may introduce changes to tax policies and mortgage incentives. These adjustments—such as to capital gains tax or first-time buyer programs—can have lasting effects on real estate market demand and property values.
- While the Federal Reserve sets interest rates independently, anticipated policies from the U.S. Election winner may influence its approach. Rates may hold steady before elections but adjust post-election to align with the new administration’s economic priorities.
References
Estrada, S., Lazzaro, S., Schwartz, L., Nusca, A., Botros, A., Prater, E., & Adamczyk, A. (2024, November 7). Experts say mortgage rates will stay high as Trump inflation fears negate expected Fed cut. Fortune. Retrieved November 8, 2024, from https://fortune.com/2024/11/07/experts-mortgage-rates-stay-high-trump-inflation-fears-negate-fed-rate-cut/
Genovese, D. (2024, February 26). Real estate: How an election year can impact the market. Fox Business. Retrieved November 7, 2024, from https://www.foxbusiness.com/real-estate/real-estate-how-2024-election-impact-market
How Did Voter Turnout Compare? (2024, November 6). Foreign Policy. https://foreignpolicy.com/projects/2024-us-president-election-live-updates-harris-trump/?article_anchor=us-presidential-election-2024-voter-turnout-comparison
How Presidential Election Years Shape the Housing Market. (2024, May 7). The Mortgage Reports. Retrieved November 7, 2024, from https://themortgagereports.com/112291/how-do-presidential-elections-affect-real-estate
Santarelli, M. (2024, October 18). Housing Market Predictions Post 2024 US Elections. Norada Real Estate Investments. Retrieved November 7, 2024, from https://www.noradarealestate.com/blog/housing-market-predictions-after-2024-us-elections/
