Do Presidents Affect the Housing Market?

Today, I'm answering the question that's on everyone's mind: Do presidents affect the housing market? I've analyzed data from 1971 to 2024, covering ten presidencies, to bring you insights on this complex and often debated topic. Let's find out!

Presidential Tenures and Housing Market Trends

Nixon Administration (Republican, 1969-1974)

• Median house prices: $24,300 to $36,200 (49.0% increase)
• Mortgage rates: 7.33% to 9.50%
• Unemployment rate: 3.5% to 5.5% (57.1% increase)
• Key event: 1973-1975 recession

Ford Administration (Republican, 1974-1977)

• Median house prices: $36,200 to $46,300 (27.8% increase)
• Mortgage rates: 9.50% to 8.73%
• Unemployment rate: 5.5% to 7.5% (36.4% increase)
• Key event: Continued aftermath of 1973-1975 recession

Carter Administration (Democrat, 1977-1981)

• Median house prices: $46,300 to $66,800 (44.3% increase)
• Mortgage rates: 8.73% to 14.85%
• Unemployment rate: 7.5% to 7.5% (0% change)
• Key event: 1980 recession

Reagan Administration (Republican, 1981-1989)

• Median house prices: $66,800 to $118,000 (76.6% increase)
• Mortgage rates: 14.85% to 10.71%
• Unemployment rate: 7.5% to 5.4% (28.0% decrease)
• Key event: 1981-1982 recession

George H.W. Bush Administration (Republican, 1989-1993)

• Median house prices: $118,000 to $125,000 (5.9% increase)
• Mortgage rates: 10.71% to 8.04%
• Unemployment rate: 5.4% to 7.3% (35.2% increase)
• Key event: 1990-1991 recession

Clinton Administration (Democrat, 1993-2001)

• Median house prices: $125,000 to $169,800 (35.8% increase)
• Mortgage rates: 8.04% to 7.02%
• Unemployment rate: 7.3% to 4.2% (42.5% decrease)
• Key event: Dot-com boom

George W. Bush Administration (Republican, 2001-2009)

• Median house prices: $169,800 to $208,400 (22.7% increase)
• Mortgage rates: 7.02% to 4.96%
• Unemployment rate: 4.2% to 7.8% (85.7% increase)
• Key events: 2001 recession, 2007-2009 Great Recession

Obama Administration (Democrat, 2009-2017)

• Median house prices: $208,400 to $313,100 (50.2% increase)
• Mortgage rates: 4.96% to 4.09%
• Unemployment rate: 7.8% to 4.7% (39.7% decrease)
• Key event: Recovery from Great Recession

Trump Administration (Republican, 2017-2021)

• Median house prices: $313,100 to $355,000 (13.4% increase)
• Mortgage rates: 4.09% to 2.79%
• Unemployment rate: 4.7% to 6.4% (36.2% increase)
• Key event: COVID-19 pandemic and brief 2020 recession

Biden Administration (Democrat, 2021-2024)

• Median house prices: $355,000 to $467,700 (31.7% increase)
• Mortgage rates: 2.79% to 6.89%
• Unemployment rate: 6.4% to 4.1% (35.9% decrease)
• Key event: Post-pandemic recovery and inflation

Do Presidents Really Affect the Housing Market?

After examining this dataset, we can draw several conclusions:

1. Long-term Trends: Housing prices have generally trended upward across all administrations, regardless of party affiliation.

2. Economic Cycles: Both Republican and Democratic administrations have experienced periods of growth and recession, suggesting that broader economic cycles may have more impact than specific presidential policies.

3. Mortgage Rate Fluctuations: Mortgage rates have seen significant variations, often influenced more by Federal Reserve policies and global economic conditions than by direct presidential actions.

4. Consumer Credit Growth: Consumer credit has shown a general upward trend since 2000, with significant growth during the Obama administration and continued increase under subsequent presidencies.

5. External Factors: Major events like oil crises, tech booms, financial crises, and global pandemics have had substantial impacts on the housing market, often overshadowing policy effects.

6. Policy Lag: The effects of housing policies often extend beyond a single administration, making it difficult to attribute market changes to specific presidents.

7. Complexity of Factors: The balance between housing prices, mortgage rates, and consumer credit is complex and doesn't always follow predictable patterns based on party policies.

While presidents can influence economic conditions through policies and appointments, the data suggests that their impact on the housing market is often indirect and overshadowed by larger economic forces and long-term trends. These trends seem to persist regardless of the party in power.

As we move forward in 2024, with high house prices, rising mortgage rates, and increasing consumer debt, it will be fascinating to see how current and future administrations attempt to address these challenges. Will their efforts significantly shape the market, or will broader economic conditions continue to be the primary drivers? I guess we have to wait and see!

Here are some extra charts:

Sources: https://fred.stlouisfed.org/

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