The housing market in election years: What history shows
While there’s a persistent notion that presidential elections hamper the housing market, recent history tells a different story. There have been nine elections since 1987. Contrary to what many would expect, home price appreciation in those years outpaced appreciation in the 28 non-election years since, according to a Bankrate analysis of the S&P CoreLogic Case-Shiller Home Price Index.
Case-Shiller data shows that, on average, home prices have climbed 4.84 percent in election years since 1987. In non-election years, values rose 4.44 percent. That might lead to the conclusion that presidential elections are good for the housing market, but the reality is far more nuanced.
Year | Appreciation |
---|---|
SOURCE: Case-Shiller Home Price Index | |
1987 | 7.22% |
1988 | 7.23% |
1989 | 4.39% |
1990 | -0.69% |
1991 | -0.17% |
1992 | 0.82% |
1993 | 2.16% |
1994 | 2.52% |
1995 | 1.79% |
1996 | 2.43% |
1997 | 4.02% |
1998 | 6.44% |
1999 | 7.68% |
2000 | 9.29% |
2001 | 6.68% |
2002 | 9.56% |
2003 | 9.82% |
2004 | 13.64% |
2005 | 13.51% |
2006 | 1.73% |
2007 | -5.40% |
2008 | -12.00% |
2009 | -3.85% |
2010 | -4.11% |
2011 | -3.88% |
2012 | 6.44% |
2013 | 10.71% |
2014 | 4.51% |
2015 | 5.20% |
2016 | 5.31% |
2017 | 6.21% |
2018 | 4.52% |
2019 | 3.68% |
2020 | 10.43% |
2021 | 18.87% |
2022 | 5.65% |
2023 | 5.56% |
For instance, the worst year for the housing market in recent decades by far was 2008. Home values plunged 12 percent that year, according to Case-Shiller. That had little to do with Barack Obama’s battle with John McCain — rather, the drop in home prices was all about economic timing. The historic housing bubble of 2004 to 2007 finally burst, and the global economy collapsed.
Meanwhile, 2004 was one of the best years for home prices. Home values soared 13.4 percent, a result primarily due to the inflating housing bubble, not George W. Bush’s re-election that year.
The best year for home values since 1987 came in 2021. Values soared 18.9 percent that year amid record-low mortgage rates and the COVID-19 housing boom — not because it was 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 large listing service in the mid-Atlantic region. “It’s really about demographics and the economy.”