new study predicts 2020 election impact on new homebuilding

Counties across the country that voted for Donald Trump in the 2016 election have seen an increase in single-family building permits since that election, according to a just released financial analysis.

Conversely, counties that tended to support Hillary Clinton have experienced an 8.5 percent decrease since the 2016 election, say the report published by the New York-based global financial services firm BTIG.

The statistics are even more noticeable in counties one or the other candidate carried in a landslide. In Trump landslide counties, home building permits have been up by 11 percent, while permits have dropped by 9 percent in Clinton landslide counties.

If current trends continue, says the report, One House, Two House, Red House Blue House, a Republican presidential victory could lead to continued homebuilding growth in rural and exurban counties, while a Democrat presidential victory may see a significant increase in more urban-oriented counties.

“It’s feasible that change in admission might benefit trailing blue county housing dynamics,” notes the report, “while the re-election of President Trump could continue to propel red county outperformance.”

The report, authored by homebuilding analyst Carl E. Reichardt, Jr., suggests that a difference in basic economic trends between Trump and Clinton counties may be one of the primary reasons for the homebuilding contrasts.

Trump rural counties, have benefitted in recent years from the “gradual shifts in housing activity to less expensive, more outlying regions in which the voting populations tends to be more conservative.”

“California, a heavily blue state, as well as parts of the Northeast have seen weaker construction data in part due to the high cost of housing, and heavier levels of domestic out-migration,” continues the report.

Whichever party wins the White House in November, the report adds, the election campaign itself as it heads into the fall months will likely prove a particular downer on home buying.

The report notes that over the course of the last 14 presidential elections going back to 1964, home buying has dropped by an average of 15 percent between the October and November of an election year.
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“This may indicate that potential homebuyers may become more cautious in the face of national election uncertainty,” says the report, adding that such caution has almost always proven to be of a temporary nature. 

​By Garry Boulard

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