With less than a month until Election Day, predictions about the presidential race’s outcome are dominating the news. Experts have weighed in on everything from how the new president might affect everything from foreign policy to the economy—including the housing market! If you’ve been thinking of selling your current Long Island home or purchasing a new property here, you might be holding off until you see the election results, but here’s the bottom line: presidential elections don’t affect the housing market all that much. Even on a national scale, an individual president’s policies do not tend to drastically influence the market one way or another.
Several factors drive the US housing market, but key among them are interest rates and consumer behavior. That’s what we will break down in today’s blog post, along with each candidate’s campaign promises on housing, to help you understand what might be in store for the Long Island real estate market over the next six months.
Harris vs. Trump—How Might Their Policies Affect the Long Island Market?
Although housing isn’t a top issue in this election, it’s still worth looking at both candidates’ stances.
Donald Trump’s Campaign Promises: Former President and Republican Donald Trump is focused on reducing illegal immigration, which he says is helping to drive up housing costs. He also wants to open federal land for the construction of new homes, eliminate regulations that make building costly, and encourage the construction of more homes on the periphery of cities.
Kamala Harris’s Campaign Promises: Vice President and Democrat Kamala Harris wants to create a $25,000 grant program for first-time home buyers to help with down payment costs. She also wants to remove some tax benefits for real estate investors who own a significant number of properties while incentivizing builders to build more starter homes and rental properties through tax credits.
Click here to read more about their individual policies on housing.
The message on both sides of the aisles is that the candidates want to see more homes built across America. While they differ in how to get that done, their primary focus is helping America catch up on inventory during the next presidential term.
Mortgage Interest Rates Are Dropping—Will the Election Change That?
Since late summer, mortgage interest rates have been on a downward trend. This started as predictions that the Federal Reserve (the Fed) would cut the standard interest rate at the September meeting gained steam. While the standard interest rate doesn’t directly affect mortgages, the Fed’s decisions signal the overall health and strength of the economy. The Fed did decide to cut the prime rate by fifty basis points, which has helped keep mortgage rates in the 6% range, down from last October and November’s peak of nearly 8%.
According to Keeping Current Matters, mortgage rates historically decrease before elections, so we expect that, at least for the remainder of October, rates will stay around 6%. Rates decreased leading up to eight of the last eleven elections, including the 2020 election.
How Might Consumer Behavior Change Based on Who Wins the Election?
Ask any longtime real estate agent, and they’ll tell you that the housing market gets quiet around election time. Most consumers feel a certain amount of anxiety over the impact of the results and tend to put off both their purchases and sales during this window. How quickly people return to the market can vary depending on what other factors are at play. However, with lower interest rates, buyers may be incentivized to get back into the market quickly, which is reflected in early reports about next year’s housing market from experts like Goldman Sachs. Home prices could rise nationwide by 4-5% in 2025.
While the presidential election is an important part of US society, if you’re worried about the outcome and how it may affect your real estate plans, you can feel more confident that whatever short-term effects come of the election, the housing market usually tends to bounce back quickly. Lower rates and higher inventory are helping to shape the 2025 market, and we are already working with clients who are putting their plans together now. If change is on the horizon for you later this fall or in the new year, we would be honored to partner with you. Get in touch with us at the Pesce & Lanzillotta Team to learn about our strategies for success!
The Pesce & Lanzillotta Team, at BHHS Laffey International Realty
Office: 516-888-9711
Email: info@pl-team.com
