There are real estate investors who might be a bit wary to do too much the closer we get to the presidential election. Don’t the stock markets tank right before the election? Doesn’t the Fed raise orGDP Error Rate 1.3% lower rates to affect the outcome one way or the other? And once the winner is announced, will the stock markets welcome the result and rally or will markets cringe and limp toward the end of 2016? For skittish investors, those are the ones that will sit on cash and stay out of investing of any stripe. But is that a strategy? Is that even true that presidential elections affect what your financing costs will be and indicate future values of real estate?

 

No. We looked at data as far back as 1972 when Richard Nixon ran against and soundly defeated George McGovern. In 1972, there was no discernable difference throughout the campaign season. According to data collected by Market Watch, mortgage rates hovered around 7.30% and gradually rose 30 basis points to 7.60% and fell slightly in November of 1972 to 7.43%. There’s no discernable impact. Okay, let’s look at another election when the Republican candidate was defeated. After the 1992 election when Bill Clinton defeated George HW Bush, rates dropped by 10 basis points in December. Again, hardly noticeable.

Presidential elections apparently have no impact on stocks, bonds or mortgage rates. Perhaps the length of our campaigning season allows investors to spend more time analyzing what one candidate would do compared to another and come to the conclusion that neither party has a major influence one way or the other. The bottom line here is still the same- if the math works out on a potential investment then it’s time to do the deal. Waiting means missed opportunities. The same evaluation methods work whether we’re electing a president or not.