A quarter of Americans responding to a recent online poll said they would delay their decision to buy a home until after the November elections.
The finding is another sign that the looming political battles over the “fiscal cliff” and raising taxes are contributing to the sluggish pace of economic recovery.
But according to the poll’s sponsor, what it says about the stakes in the upcoming election is not as disturbing as the link Americans are making between politics and personal finance. “We assign way too much credit or blame to our politicians,” says Rick Allen, chief operating officer of Mortgage Marvel, a mortgage shopping website.
“The election will make some impact on the direction of the economy,” says Allen, “but it makes more sense to make the call based on where you are in your job and your career.”
The poll, conducted by Harris Interactive, recorded the sentiments of 2,570 American adults. Thirteen percent said they would definitely put off a purchase until after the election, and another 12 percent said it would factor into their decision. Fifty three percent said the election would have no effect on their decision to buy.
Because the poll didn’t isolate prospective homebuyers, it better represents how the public feels about the real-estate market in general than it does real-world buying patterns. The only specific threat homebuyers face from Washington is the proposal by some Republicans to get rid of the tax deduction for mortgage interest. Most observers agree, however, that repealing the deduction would be politically impossible.
Those selling a home have more to fear from an outright Democratic victory in November, or a close election that results in a highly brokered budget deal. President Obama has advocated raising the capital gains rate, and if the Bush tax cuts are not renewed, the rate will automatically increase from the current 15 percent to 20 percent.
Because of the $500,000 exclusion for married couples on the profit from the sale of a home ($250,000 for single filers), a capital gains hike will effect mostly those at highest end of the real estate market. A married couple who clears a million dollars after selling their house will pay $25,000 more if the Bush tax cuts are allowed to expire.
Of course the election, Allen says, will have some effect on the housing market. “To the extent that it influences consumer confidence, it will effect activity,” he says. But the mood of the market after the election is too hard to predict — and too easily confused with one’s own political leanings to let it guide decisions about personal finances.
Some, the poll suggests, seem to be doing precisely that. Those who responded to the Harris poll in the Republican-heavy South were slightly more apt to wait to see who wins the election before laying out for a new home.
Depending on who you’re rooting for, says Allen, “you either think it’s the beginning of the end or the return to prosperity.”