How much does the president in the White House affect the price of your house in California? Does blue or red make more green?
It’s a generations-old question that is asked every presidential election cycle.
After crunching data from the past 35 years, the figures are head-turning but also kind of a shoulder shrug. With each administration comes more caveats that affect home prices than certainties (see table of home prices during the past five presidents).
For example, President Biden has battled the second half of the COVID pandemic and the highest inflation rate since the Reagan administration, prompting the Federal Reserve to increase interest rates that lifted mortgage rates. The cost of borrowing to buy a house has doubled since spring 2022.
But home prices in California have increased more than 50% between May 2020 and today, according to the California Association of Realtors. Good for homeowners, miserable for buyers.
President Trump was faced with the initial outbreak of COVID, which slammed the brakes on home sales in the first half of 2020. Many Californians were concerned about the economy, employment and their housing situation. Uncertainty ruled. Still, home prices jumped 46%.
President Barack Obama, the last two-term president, was handed the housing market collapse and the mortgage crisis, also known as the Great Recession. For the record, the Great Recession was not so great for homeowners as prices – and home values – were cut in half before recovering and soaring in his second term.
Presidents George W. Bush and Bill Clinton each had their challenges, but California’s housing market was more like a leaf in the wind than a fast-growing vine during their time in the White House. Both two-term presidents had annual home price gains of less than 4% during their eight-year spans.
President Obama battled the housing market collapse and the foreclosure crisis during his first term. SHUTTERSTOCK
In comparison, the median home price has increased $70,000 during the past year – or almost as much as the yearly income of the average California household.
DRUM ROLL, PLEASE …
So, what U.S. president has been the best for homeowners (and, in turn, tough on wanna-be buyers) in the Golden State?
Obama. Hands down. Prices up.
California’s median home price – meaning half the homes sold for more, the other half for less – increased 119% during his eight years working and living at 1600 Pennsylvania Avenue.
The annual 15% gains for Obama easily outpace the 11.5% for Trump and 8.5% for Biden (to be fair, Biden still has seven months left in his first term and prices have increased about $6,000 per month, which would increase the figure to 9%).
| President | Inauguration home price | Price last month in office | % gain |
|---|---|---|---|
| Joe Biden | $700,150 | $908,040* | +29.7% |
| Donald Trump | $491,840 | $717,930 | +46.0% |
| Barack Obama (two terms) | $249,060 | $546,550 | +119% |
| George W. Bush (two terms) | $226,870 | $283,060 | +24.8% |
| Bill Clinton (two terms) | $191,670 | $248,354 | +29.6% |
Note: Home price is through May 2024.
Source: California Association of Realtors
Now, the Obama administration entered as home prices plummeted and foreclosures soared, largely giving him nowhere to go but up. But he also battled an abundance of homes on the market – if they weren’t already in the foreclosure process – and a bitter cold mortgage industry that took much time to thaw.
To address the issue, the Obama administration established a national mortgage-assistance program to help financially strapped homeowners facing foreclosure and, in turn, mortgage lenders. Keep Your Home California, a $2.3 billion piece of the federally funded program, assisted about 80,000 homeowners for a decade starting in 2011. The goal was to help homeowners, but also stop a flood of foreclosed homes on the market, which would have lowered prices more.
DOES IT MATTER WHO IS IN THE WHITE HOUSE?
Crunching data is easy; finding the correlation between the president and prices is much tougher.
Many housing experts agree that other factors – such as the condition of a home and location – are more important than the president. Remember, location is the rule in real estate.
Of course, the economy also plays a major role in the housing market. The Federal Reserve and Fed Chief Jerome Powell have a more direct impact on the market. The California Association of Realtors came to the same conclusion in a report when Secretary of State Hillary Clinton was running against Trump in 2016.
So, chances are, regardless of who wins the White House in November, the demand for homes in California will easily outpace the supply. And the president will have little, if any, role in prices and values.
