Forecasting 2024: Housing Market Outlook Amidst Layoffs and Presidential Election

Amidst a landscape fraught with political tension, economic turmoil, and global conflict, the housing market finds itself at a critical juncture in 2024.

With a contentious presidential election looming, ongoing geopolitical unrest, and the specter of widespread layoffs haunting the corporate landscape, the year ahead promises to be one of unprecedented challenges and uncertainties.

As these complex issues continue to unfold, their reverberations are poised to significantly impact the housing sector, which has already grappled with stagnation in the wake of soaring home prices and mortgage rates.

For many individuals, buying or selling a home represents a monumental financial decision—one that may be further complicated by prevailing anxieties about the future. In times of uncertainty, individuals may be inclined to adopt a cautious approach, opting to refrain from entering the housing market and maintaining their current housing arrangements instead.

“In 2024, the prevailing sentiment is one of uncertainty,” remarks Yelena Maleyev, a senior economist at KPMG. “Uncertainty has a palpable effect on the economy, impeding investment decisions and dampening consumer spending. As such, its impact on the housing market cannot be overlooked.”

Beyond the intricate dance of buyer and seller psychology lies a pivotal factor that could sway the trajectory of mortgage rates: the state of the economy. The ebb and flow of economic indicators will wield significant influence over the future direction of mortgage rates.

Should mortgage rates experience a downward trend, the prospect of closing on a home may become markedly more attainable, potentially enticing prospective buyers—provided they maintain stable employment to support their homeownership aspirations. Conversely, an upward shift in rates could prolong the market’s state of indecision, casting a shadow of uncertainty over the housing landscape.

“While apprehensions loom regarding the path ahead,” notes Danielle Hale, Chief Economist at®, “it’s important to recognize that these developments unfold over time, rather than in immediate fashion.”

Could the upcoming presidential election put the brakes on home sales?

As the nation braces for the impending U.S. presidential election, slated to take place later this year, the specter of political uncertainty looms large.

With another potential face-off between President Joe Biden and former President Donald Trump on the horizon, albeit with the Republican nominee yet to be determined, the repercussions of the election transcend mere political implications, profoundly impacting various sectors, including the housing market.

The prospect of a new administration ushering in a wave of policy changes, coupled with the attendant apprehension, may prompt prospective buyers and sellers alike to adopt a cautious stance, irrespective of their political affiliations. However, historical data suggests that any disruption attributable to the election tends to be transient, with the market typically resuming its normal rhythm post-election.

“Typically, the housing market remains relatively steady throughout the year, with the exception of a slight slowdown in November during an election year,” explains Ali Wolf, Chief Economist of building consultancy Zonda. “By December, however, we usually observe a return to normalcy.”

Despite the monumental significance of electing the nation’s leader, the presidential election does not invariably reign supreme as the primary economic determinant in a given year.

“Undoubtedly, the presidential election will command significant attention from Americans, regardless of their personal preferences,” notes Danielle Hale, Chief Economist at®. “However, its impact on the economy might not be as substantial as anticipated.”

Consider the historical backdrop of 2008, when Barack Obama ascended to the presidency amidst a backdrop of housing market upheaval, marked by widespread foreclosures and economic turmoil. Similarly, in 2020, the emergence of the COVID-19 pandemic initially precipitated a market slowdown, only to be followed by a swift rebound driven by evolving consumer preferences and record-low mortgage rates.

While the election undoubtedly garners attention, it seldom holds sole sway over economic outcomes. Instead, a confluence of factors, from geopolitical tensions to domestic policy decisions, collectively shape the trajectory of the housing market.

“The housing market is susceptible to a multitude of influences, both domestic and international,” asserts Jacob Channel, Senior Economist at LendingTree. “While encouraging signs abound, the landscape remains fraught with uncertainty, and outcomes remain contingent upon a myriad of variables.”

However, looming large on the horizon is the specter of recession and widespread unemployment. Since March 2022, the Federal Reserve has undertaken a series of interest rate hikes to combat inflationary pressures. Despite tentative plans to commence rate cuts contingent upon inflation moderation, the efficacy of these measures remains a subject of debate among economists.

Compounding these concerns are reports of layoffs by several prominent companies, signaling potential headwinds for the labor market. Although unemployment levels remained relatively low as of January, recent data suggest a surge in job losses, further exacerbating fears of economic instability.

Amidst these uncertainties, the housing market stands at a crossroads, with consumer sentiment and job security emerging as critical determinants of housing activity. Against a backdrop of rising unemployment, prospective buyers may adopt a cautious stance, casting a pall over housing market dynamics.

Yet, paradoxically, rising unemployment could pave the way for lower mortgage rates, as the Federal Reserve seeks to stimulate economic activity. In turn, reduced borrowing costs could catalyze housing market activity, providing a much-needed impetus amidst prevailing economic headwinds.

Furthermore, geopolitical tensions, particularly in regions such as Ukraine and the Middle East, have the potential to roil global markets, resulting in higher mortgage rates and inflationary pressures. Consequently, any disruption to trade and commodity markets could reverberate across the U.S. economy, exerting upward pressure on borrowing costs and stymying housing market activity.

Matthew Graham
Matthew Graham
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