"I have never had a session blow up where the participants were disappointed on both sides, where everyone was embarrassed and everyone was upset about what had happened," Luntz said on "Squawk Box," while agreeing with the participants' assessment.
Trump and former Vice President Biden held a bitter 90-minute debate Tuesday night, the first of three scheduled debates ahead of the Nov. 3 election. The candidates frequently interrupted the other, with Biden at one point saying to Trump, "Will you shut up, man?"
"They felt like they didn't get the policy they were looking for," such as on economic issues, Luntz said, referring to the more than dozen participants in his debate focus group.
"They felt like the candidates behaved as though they didn't deserve to be president," Luntz added. "It actually makes them less likely to vote for any candidate."
Luntz said the debate made him recalibrate some expectations about voter participation in the election. "I would have said to you, we're going to have the biggest turnout ever. What happened last night absolutely encouraged people not to vote."
Luntz said the focus group participants felt Trump was the "aggressor" in the debate. "When we asked them, 'Given me a word or phrase to describe Donald Trump,' it's pretty negative," he said. "But it wasn't positive about Biden, either. Both candidates suffered."
In particular, Luntz singled out economic issues as a subject the undecided voters craved more information about, given the coronavirus pandemic-induced damage is omnipresent in the country; in August, the nation's unemployment rate was over 8%.
Luntz said he felt Biden frequently tried to bring the conversation to Trump's health-care policy — or, as Biden presented it, the president's lack of plan to replace the Affordable Care Act, should the law be found unconstitutional by the Supreme Court.
"Well, they wanted to know where Biden's jobs plan are. They wanted some specifics so they could have the excuse to vote for the alternative," Luntz said, calling the economy the second-most important issue behind the coronavirus. "They got none of it from either candidate. All they got was insults."
As of Wednesday morning, Biden led Trump by 6.1 percentage points in an average of national polls compiled by RealClearPolitics.
Some of Biden's most compelling moments in the debate were when he looked directly in the camera, attempting to address the American people directly, according to Luntz. "Every time he did that, he was scoring points. Every time that he got dragged into this, he was losing."
"The expectation was they were going to learn something from last night," Luntz said. "What happened is they realized how low it can go. And I don't know what happens in debate two or three."