Homeowners are worse off than they were four years ago, multiple reports show, and the two presidential candidates have differing views on how to improve their plight.
Only 10% of prospective home buyers polled said they could afford to buy a home, saying the American dream of home ownership was out of reach. According to a Zillow report, home buyers need 80% more income to buy a home today than they did four years ago, The Center Square reported earlier this year. Monthly mortgage payments, with 10% down, for a typical U.S. home have doubled since January 2020.
In seven swing states, the median monthly housing payment has doubled since the 2020 election and the median sale price in swing states increased by nearly 40%, Redfin notes. It analyzed data from 2016 through the first five months of 2024 in Arizona, Nevada, Wisconsin, Michigan, Pennsylvania, Georgia and North Carolina.
Home buyers’ median housing payments “increased 95% to a record $2,066 in red states and 83% to a record $3,311 in blue states,” the analysis found. Redfin focused on swing states because “voters in those states will decide the winner of the 2024 presidential election, and housing affordability – or lack thereof – is a crucial issue on voters’ minds.”
“The typical swing-state home has gone from affordable to unaffordable for the typical family since the 2020 election,” Redfin said. “The typical family would spend 33% of their earnings to afford the median-priced home in a swing state; back in 2020, they would have spent 22% of their earnings.”
Since 2020, housing costs have increased more than three times faster than incomes, making “homeownership feel impossible for some Americans,” Redfin senior economist Elijah de la Campa said. “That’s especially true for young people who are earning low incomes and haven’t yet built up their savings, making them feel it would be an uphill battle to reach their parents’ level of financial success.”
“While swing states have historically had lower housing costs than blue states – and most still do – markets in swing states have not been immune to the affordability crunch the country has been facing for the last several years. The inability to afford a home is making a lot of voters feel bad about the economy and their financial prospects.”
At the Democratic National Convention last month, Vice President Kamala Harris said her administration would “end America’s housing shortage” after affordability worsened while she’s been in office.
Harris’ plan includes up to $25,000 in taxpayer-funded down payment support for an estimated four million “working families” who are first time home buyers. She’s also called for four million housing units to be built, including one million by the private sector.
Her plan does not say how she would pay for this, although she has vowed to go after big corporations she blames for increasing costs. She also claims no one earning under $400,000 a year “will pay more in taxes.” Taxes will be increased on the wealthiest Americans and the largest corporations to ensure they “pay their fair share, so we can take action to build up the middle class while reducing the deficit,” her website states.
This includes rolling back former President Donald Trump’s tax cuts “for the wealthiest Americans, enacting a billionaire minimum tax, quadrupling the tax on stock buybacks, and other reforms to ensure the very wealthy are playing by the same rules as the middle class.”
Harris also plans to increase the tax rate on long-term capital gains for those earning a million dollars a year or more to 28%, up from 0%, 15% or 20%, depending on the tax bracket, according to the Internal Revenue Service. Increasing this tax, she argues, is an example of the federal government encouraging investment, which she says “leads to broad-based economic growth and creates jobs, which makes our economy stronger.”
By contrast, Trump has proposed cutting the corporate tax rate to 15% for companies that manufacture products in the U.S., make permanent his 2017 tax cuts on all Americans, rein in wasteful federal spending, cut excessive regulations, and impose tariffs on imports. To “make the American Dream affordable again,” his plan to help new home buyers is “to reduce mortgage rates by slashing inflation, open limited portions of Federal Lands to allow for new home construction, promote homeownership through Tax Incentives and support for first-time buyers, and cut unnecessary Regulations that raise housing costs.”
By reducing the federal regulatory burden, lowering energy costs, and other economic policies, he says his administration will “drive down the cost of living and prices for everyday goods and services.”
