With the looming 2024 presidential election, home prices have become a major topic of contention amidst the rising mortgage rates and unattainable home prices for many first-time buyers. President Biden has proposed a $10,000 tax credit for first-time homebuyers and sellers in Nevada, a key swing state. The election will heavily rely on the outcomes in six other swing states, where neither candidate can win without securing at least three. The debate highlights the housing affordability crisis, with median list prices up significantly since 2021 and home price-to-income ratios at a record high, making homeownership out of reach for many.
The high cost burden for renters also plays a significant role, with nearly half of all renters spending more than 30% of their income on rent and a quarter spending more than 50%. With homeownership seen as an integral part of the American dream, affordability concerns are expected to influence voters’ attitudes towards the election. Biden’s proposals to address affordability include tax credits for first-time homebuyers and sellers and programs to finance housing developments, which have been met with skepticism by some economists who warn of potential price increases due to increased demand.
However, Biden’s tax credit for sellers could boost available inventory by encouraging homeowners to trade up. On the other hand, Trump has accused Democrats of waging a “war on the suburbs” through their efforts to increase home affordability, claiming it would negatively impact property values and quality of life. Trump’s rhetoric on housing may appeal to existing homeowners, tapping into fears that reducing housing costs for others could erode their own equity. Yet, fears over increasing housing density and affordability may be unfounded, with research showing that it can increase property values.
As the election approaches, both parties have differing messages aimed at appealing to distinct voting blocs. Biden’s proposals are focused on renters and first-time homeowners, seeking to mobilize younger voters who historically favor Democrats. Trump’s message is aimed at homeowners, with a stronger turnout potential given that homeowners are more likely to vote than renters. The balance between appealing to renters aspiring to become homeowners and homeowners who fear property devaluation will be key in the upcoming election. Overall, housing affordability is set to be a significant issue that could sway voters in pivotal swing states.
