The historic impact of a presidential election year & the housing market

Every election year,  people ask if the presidential election has a significant effect on the housing market.

The short answer is no.

There are always a few buyers who loudly claim they are deferring any home purchase decision until they find out the result of the election. These people are a tiny proportion of the total, insignificant in the overall context.

In fact, if we examine the volume of sales in the five months leading up to a November election, we discover the following statistics:

Notice that each year grouping includes one win for the Republican nominee and one win for the Democratic candidate, so sales volume does not even seem to correlate to who wins.

The weaker years (2000 & 2008) correspond to recessions which are more likely to cause weaker home sales than elections.

The housing market is affected by life decisions and events such as couples deciding to live together, to have children, to separate, job moves and a death in the family. Politics has much less impact than politicians would have you believe. The state of the economy and taxation rules will also have a significant impact on the market. But predicting how the economy will behave and what taxation changes might come into effect after a president’s election proposals have been heavily modified by congress is fraught with risk. Pundits will continue to predict, but no one is good at this forecasting and results rarely match what is predicted. Unexpected events like epidemics have a more dramatic effect on the housing market.

So the long answer is also no.

Sourced from Mike Orr’s Cromford Daily Observation