As of this writing, uncertainty and fear still fill the air. It is Tuesday, the day before the 2024 presidential election. Real estate sales have taken a dip. This is normal for an election year. In fact, this has proven true in the past 13 election cycles. If we all (Realtors) had a dollar for each time a client told us they were “waiting until after the election” to make a decision, we would all have a pile of dollars (worth very little in this economy). Either way, it would be fair to say that feelings of uncertainty and volatility have historically surrounded the election day, and this election cycle is no different.

Fortunately, these are not lost sales, just delayed sales…a temporary dip, if you will. This delay is understandable. Purchasing a new home is a big decision. Choosing a new president is a big decision. Those are two heavy decisions to make at one time. Perhaps it’s too heavy. One we have a little more control over than the other since millions of other people are not part of the decision-making process with a home. Thus, we wait. Fear tends to freeze major decisions.

If home sales are any indicator, the fear, in this case, seems to have intensified compared to other years. September closed out as being one of the slowest in nearly 30 years. Yet, as sales fell, housing prices have not, proving, once again, the freeze is temporary.

This is especially true with first-time homebuyers. In fact, one study showed that nearly 25% of first-time buyers are waiting until after the election. First time homebuyer or not, everyone seems to have an opinion, regardless of the chosen candidate, about there being an immediate economic shift. This is interesting. Perception often becomes reality. We talk about volatility so much that we create it by delaying action. It is no surprise then that when the proverbial “wild card” (in reference to nearly all political candidates) is played, then our new reality (created by our perception) materializes in the form of an energetic return of real estate activity. With the “after the election” excuse off the table, both buyers and sellers will regain confidence which may lead to an expected surge in activity. This occurred in both 2016 as well as 2020, post-election.

While elections create uncertainty, the economy rarely sees immediate change after elections. There is a small shift with consumer confidence, which in turn affects spending; however, mortgage pricing, or interest rates, are not determined by the executive office. In truth, even “the Feds” who meet regularly throughout the year to adjust federal funds based on economy health, do not directly control mortgage rates. Mortgage rates are more closely tied to the 10-year Treasury bonds. How all this works is far above and beyond my understanding. I just know when the Fed cuts rates, it often leads to lower bond yields, which in turn, can lead to lower interest rates. This is what matters to us.

Although the president does not make decisions about interest rates, they do appoint members of the Federal Reserve Board (“the Feds”) every two years. The Federal Reserve Board consists of seven members appointed by the president. They serve for a maximum of 14 years, which is considered “full term” and cannot be reinstated after that period. The current chair is Jerome Powell. This is Mr. Powell’s second term as chair and he was appointed on May 23, 2022, for a four-year term. This means that he has a little less than two years to go as current chair until another can be appointed.

As a side note, the Fed operates independently of the president. The president can disagree with the Fed’s decisions but cannot force change. Powell is a conservative, so we can make that mean what it will for interest rates. It should, however, be more of an economic decision as opposed to a political decision. What should happen and what actually happens back there on the illusive “Hill” is far outside of my circle of knowledge.

Either way, by the time this piece is in print, we will have elected a new president (barring no hanging chads, rigged election accusations, or miscounts). The election will be over and it will be time to thaw from the freeze and begin making some decisions.

Jen Fischer is an associate broker and Realtor. She can be reached at 801-645-2134 or Jen at.Jen-Fischer.com.