Election Years and the Housing Market

As another presidential election approaches, it’s time to address the recurring discussions about the republic's future, the fairness of the Electoral College, and the election's impact on the U.S. housing market.

Conventional wisdom suggests that the uncertainty surrounding an election prompts many potential homebuyers to delay their purchases. However, housing economists argue that there is little evidence that elections—either the lead-up or the results—significantly influence home values. This claim is supported by statistical data.

The Housing Market in Election Years: Historical Insights

Despite the persistent belief that presidential elections negatively impact the housing market, recent history indicates otherwise. Since 1987, there have been nine elections. Contrary to common expectations, home price appreciation during these years has surpassed that in the 28 non-election years, according to a Bankrate analysis of the S&P CoreLogic Case-Shiller Home Price Index.

On average, home prices have increased by 4.84 percent in election years since 1987, compared to a 4.44 percent rise in non-election years. While this might suggest that presidential elections benefit the housing market, the reality is more complex.

For example, 2008 was the worst year for the housing market in recent decades, with home values plummeting by 12 percent, as reported by Case-Shiller. This decline was unrelated to Barack Obama's contest with John McCain and was instead due to the economic crisis following the burst of the housing bubble from 2004 to 2007 and the global economic collapse.

Conversely, 2004 was one of the best years for home prices, with values soaring by 13.4 percent. This was primarily due to the inflating housing bubble rather than George W. Bush's re-election.

The best year for home values since 1987 was 2021, with an 18.9 percent increase driven by record-low mortgage rates and the COVID-19 housing boom, not Joe Biden's first year in office.

“Historically, the housing market doesn’t tend to look very different in presidential election years compared to other years,” says Lisa Sturtevant, chief economist at Bright MLS, a major listing service in the mid-Atlantic region. “It’s really about demographics and the economy.”

Factors Influencing Housing Prices

Home values are influenced by a complex interplay of factors, including the supply of available housing, demand, and mortgage rate trends. This complexity leads to much speculation about the influence of various factors, including election years, on the housing market.

“Many speculate on how presidential elections impact home prices,” says Ken H. Johnson, an economist at Florida Atlantic University. However, despite extensive theorizing, there is no definitive evidence that elections significantly affect home prices: “To date, there is no statistical evidence that one winning side versus the other has any impact on home prices,” Johnson notes.

While presidential candidates often highlight their economic plans, economists generally agree that presidents have minimal influence over a market as extensive as the U.S. housing sector.

Housing starts, unemployment, interest rates, and other factors are more critical than the national political scene, says Michael Seiler, a housing economist at the College of William & Mary in Virginia.

“Those other factors overwhelm the presidential election,” Seiler asserts. “The president has only so much he or she can do to control the economy.”

Indeed, for a president to significantly influence the market, they would need to direct the purchase or sale of large quantities of homes—an action beyond the president's authority. Presidents do not set mortgage rates either. For instance, Joe Biden made a first-time homebuyer tax credit a key part of his housing platform in 2020. As of 2024, this policy has not yet been implemented.

Buying or Selling a Home in an Election Year

If you are considering buying or selling a home, there is essentially no reason to let the election season alter your plans. Unless you work for a federal agency and might lose your job if the incumbent loses, the election is unlikely to directly impact your finances. For most Americans, the election outcome will have little direct effect on their income, allowing you to make real estate decisions without factoring in national politics.

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