Election 2024: Biden's Housing Problem

By KIMBERLEY HAAS

With just weeks left before the Iowa caucus and the presidential primary in New Hampshire, home affordability is weighing on the minds of voters and at least one leading economist says the issue could take center stage as the race for the White House heats up.

Daryl Fairweather, chief economist for Redfin, has said that President Joe Biden will be forced to make home affordability a cornerstone of his reelection bid.

“Even though the overall economy is strong, high housing costs are making many Americans feel poor,” Fairweather said in her recent release on housing predictions for 2024.

“Home prices are up more than 20% since President Biden took office. That’s a problem for his re-election bid: A recent poll found that 65% of voters disapprove of Biden’s handling of the economy, with lack of housing affordability likely a major factor.”

Fairweather took to social media to talk more about the issue. In a thread on X, she said, “Americans’ attitudes about the economy will hurt Biden’s reelection chances if he doesn’t deliver a persuasive message about how he will improve the housing market in his second term.”

“Biden has the opportunity to frame solving the housing shortage as his key strategy for delivering a better economic future to the American people,” Fairweather said.

In a video about an op-ed she wrote for Forbes on the topic, Fairweather said Biden needs to help increase supply through zoning reform or incentivizing new construction.

Biden has a housing problem. pic.twitter.com/acJuugNuHU
— Daryl Fairweather ⛅ (@FairweatherPhD) December 13, 2023

Biden’s administration has been sensitive to the impacts inflation and housing costs have had on Americans.

In May of 2022, they released a Housing Supply Action Plan to “ease the burden of housing costs over time, by boosting the supply of quality housing in every community.”

According to officials, the plan’s policies to boost supply were set in place to help people having trouble finding an affordable home because of a lack of inventory.

A year and a half later, with inventory still low, Americans are more pessimistic about the state of the housing market than ever, with only 14% of consumers believing it’s a good time to buy a home, according to the Fannie Mae Home Purchase Sentiment Index.

Doug Duncan, Fannie Mae senior vice president and chief economist, said there has been evidence of persistent consumer pessimism regarding the housing market throughout the year with the consumer belief that it is a “bad time to buy a home” hitting survey highs several times in 2023.

“The combination of persistent affordability challenges and less rosy household finances remain the primary drivers of the low-level plateauing of housing sentiment. Even if mortgage rates decline over the next year, which we currently expect, it’s unlikely to meaningfully affect affordability,” Duncan said in a statement.

What can Republican presidential candidates do to steal the spotlight and come out a winner on this issue?

Republicans gunning to beat Biden in 2024 have their first test of the presidential election cycle during the caucus on Jan. 15 in Iowa. The presidential primary in New Hampshire will follow on Jan. 23 and 77% of residents there believe it’s a bad time to buy a home.

Issues related to housing affordability are complex, but there are talking points for Republicans to use.

During his presidency, Donald Trump used housing as part of his strategy to rebuild the economy in the aftermath of the Great Recession and homeownership rates went up.

In Florida, the median home list price shot up 42% between April 2020 and April 2023. Gov. Ron DeSantis passed bills geared toward creating more housing, providing assistance to first-time buyers, and restricting international buyers from certain countries from purchasing real estate in Florida.

And former UN Ambassador Nikki Haley works to sum the issue up on the campaign trail by saying supply chain issues and a lack of housing industry workers have driven up prices.

“Then you look at the banks, the banks don’t want to lend to anybody. So we’ve got to focus on that as well so that people can actually afford it. And then we want to continue to raise people up in terms of giving them jobs that allow them to see the best in what could happen,” Haley said during an interview with WMUR-TV in New Hampshire.

As of Dec. 15, Trump had a commanding lead in the Republican race, with DeSantis and Haley tied for second place.