Has the new administration affected housing prices in the DC area?

Predicting how a new administration will impact the housing market is about as tricky as forecasting a swing-state vote. While policy shifts can certainly influence the economy, history suggests that elections—and the people who come in and out of office—have little direct effect on DC’s real estate market.

People vs. Policy

We’ve seen this play out before many times in the last couple decades. Since 2000, there have been seven presidential elections, five of which resulted in a new president. That’s a lot of turnover over at the White House, in Cabinet offices not to mention the new appointees, policy workers, and a wide array of other supporting staff and their offices throughout the DC area. Yet, despite an average turnover of 72 new members of Congress (and their staff) every election cycle, there’s no clear correlation between election outcomes and housing activity.

Consider two midterm elections during an incumbent’s first term. Both these elections provided a big turnover in Congress, yet the trends are drastically different.

• 2010 (midterm during Obama’s first term): Home sales fell 5.8%.
• 2018 (midterm Trump’s first term): Home sales rose 3.8%.

Why Elections Don’t Move the Market

• Most political appointees already live in the DC area.
• Congressional staff salaries often don’t support homeownership.
• Job changes happen gradually as administrations take time to fill positions.

So…What Could Actually Influence the Market?

One potential game-changer could be the return-to-office mandate. Increased demand near federal employment centers could boost housing in certain areas. Conversely, the recent spate of federal job cuts could impact local businesses and housing demand.

The Bottom Line

Housing trends remain driven by broader economic conditions, much more so than political transitions or names that are added or replaced from office directories. And although the future of federal employment remains uncertain for many in the area, DC’s economy is resilient. We have weathered events like reductions in force, BRAC, and the Great Recession before—it’s going to be okay this time, as well.

To better understand the factors that do impact housing and mortgage rates, tune into my predictions video:

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