Will The Affordability Of Homes Sway Voters In 2024?


Home affordability continues to be problematic for American families. High prices, elevated mortgage rates, and a low supply of inventory have kept adults in their 20s and 30s off the housing ladder.

At the same time, homeowners with growing families are unable to move up that ladder into properties that would better accommodate their needs for the same reasons.

It’s an issue that touches all generations because older adults are worried about their children and grandchildren. They’re also aging but if their house is paid off, it often does not make financial sense to move, even if they no longer need three bedrooms on a regular basis.

But will the affordability of homes push people to vote one way or the other in 2024?

Data released last week reflects the current state of the market.

More than 85% of metro markets saw home price increases in the last quarter of 2023, according to the National Association of Realtors. As mortgage rates dropped from 7.79% to 6.61%, 15% of the 221 tracked metro areas experienced double-digit price gains.

Analysts at NAR estimate that the national median single-family existing-home price grew 3.5% to $391,700 in the past year.

Chief Economist Lawrence Yun said while homeowners have benefited from price appreciation, “homebuyers have been shocked at high housing costs, with a typical monthly mortgage payment rising from $1,000 three years ago to more than $2,000 last year.”

The National Association of Home Builders/Wells Fargo Housing Opportunity Index shows that just 37.7% of new and existing homes sold between the beginning of October and the end of December were affordable to families earning the U.S. median income of $96,300. This is one of the lowest readings recorded since the NAHB began tracking affordability on a regular basis in 2012.

Scott Olson, executive director of Community Home Lenders of America, said in an interview with The Mortgage Note that although home affordability impacts a significant number of American families, it may not be enough to sway the opinions of voters.

Olson said that many people who are middle-aged or older don’t feel like there is a housing crisis.

“Now, if they have kids, then maybe it’s a different story because the crisis is, of course, in the generations of people who are in their 20s and 30s that are making decent money and in earlier generations would have easily been able to afford to buy a house and are now almost kind of priced out,” Olson said.

Olson said he wishes there was a sizeable portion of the electorate that would make their voting decisions based on addressing housing challenges, but that’s never been the case and he isn’t sure that is the case today.

“Housing, even though it’s probably a bigger problem than ever before, is not going to move voters significantly in terms of who they are going to vote for but I do think it’s important that the candidates be able to articulate the problems that are out there and explain that they get it and they understand who’s struggling with things like rent or the incapacity to buy a home,” Olson said.

There has been some legislative pressure on the Fed to drop their rates to alleviate the pressure on the housing market.

Although they do not dictate mortgage rates, the decisions by members of the Federal Open Market Committee influence them. In a letter sent to Federal Reserve Chair Jerome Powell, U.S. Senators Elizabeth Warren (D-Mass.), John Hickenlooper (D-Colo.), Jacky Rosen (D-Nev.), and Sheldon Whitehouse (D-R.I.), urged the Fed to reverse hikes to the federal funds rate prior to their January meeting.

“Over the past year, as a result of the Fed’s aggressive rate hikes, mortgage rates have risen to the highest levels seen in our country in 23 years,” the letter stated. “The direct effect of these astronomical rates has been a significant increase in the overall home purchasing cost to the average consumer.”

Warren is a member of the Senate Banking, Housing, and Urban Affairs Committee. She is running for a third Senate term in 2024. Rosen and Whitehouse are also up for reelection.

Powell responded to a question about the letter during a press conference after that meeting, saying their job is to focus on overall price stability and maximum employment. He added that when they cut rates at the beginning of the pandemic, the housing industry was helped more than any other industry.

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