I write about real estate and the housing market.
In the weeks leading up to a general election, consumers tend to get skittish about major purchases like houses, cars, weddings and investments. After the election, regardless of the outcome, they open up their wallets and shop again.
It’s the election shopping slump.
As the presidential election draws near, my colleague Jordyn Holman and I wanted to see if the trend was holding true this year as well. In a new article that published this morning, we find that it is.
Wedding planners told us that newly engaged couples were too distracted to book events for next year. Financial advisers said their clients were keeping their assets in cash. Car dealers said shoppers were staying on the sidelines.
In today’s newsletter, I’ll explain what drives this behavior, and why it’s not unique to this election cycle.
The pivot point
There are a lot of reasons Americans are reluctant to buy homes right now. Inflation drove mortgage interest rates to a 20-year high, and a lack of housing stock kept prices from falling, exacerbating an affordability crisis. But even in years when the housing market was more amenable, buyers got nervous before they went to the polls.
Jonathan Miller, a real estate appraiser, looked back at two decades of home sales in Los Angeles, Manhattan and Miami and saw a pattern: Sales dipped in the second half of even years and bounced back in odd years. “Election Day is the pivot point,” he said. “It’s like the foot is taken off the brake after the election.”