Home sales unaffected by presidential elections

Presidential elections have little impact on home sales in the five months leading up to such elections, according to research by John Burns Research & Consulting. The firm measured both new and existing homes.

“The annual seasonal decline in home sales is no worse in election years than in non-election years, according to 35 years of data,” researchers reported, nothing buyers who defer home purchase decisions are the exception rather than the rule.

Burns compared the non-seasonally adjusted, year-over-year change in new and existing homes in the 5-month period leading up to the November presidential election. Their analysis found new home sales declined by -14% on average, and existing home sales dropped by -22% on average in non-election years. In election years, new home sales declined by -10% on average, while existing home sales declined by an average of -19%.

Findings also showed a greater-than-seasonally-expected slowdown in home sales is more correlated with a weak economy than presidential elections. Downturn years of 1980, 2001, 2006, 2007, 2008, and 2018 tended to be correlated with official recessions or other significant downturns. Consumers typically defer large purchases “due to economic uncertainty or simply a lack of steady income,” the report stated.

Another key takeaway Burns researchers noted was to “ignore the loudest voices in the room.” Political discourse can be loud and pervasive, but home purchases are usually life decisions rather than political ones, they explained.

The report included comments by some agents in this year’s Real Estate Agent Survey who said some buyers expressed hesitation due to the political climate this year. “Be wary of extrapolating broader trends from these anecdotes – the data just doesn’t back it up,” they cautioned.

The firm’s New Home Trends Institute found that only 8% of consumers claim to be deferring their home purchase specifically due to the presidential election – “and this is likely an overstatement,” according to Burns. That means 92% of consumers are not postponing their home purchase.

Burns Real Estate & Consulting tracks more than 400 leading economic and housing indicators every month. The firm plans to continue monitoring the housing market’s reaction to the upcoming presidential election.