Housing affordability crisis deepens voter frustration, shapes election dynamics

WASHINGTON – Voters believe the country’s housing affordability crisis is fueling their frustration with the economy ahead of this year’s presidential election.

Experts believe the root of the problem lies in the country’s failure to build enough homes for its growing population, making the American dream even more elusive, despite President Joe Biden’s assurances that the US economy is strong and underscoring the degree to which Republican Donald Trump , the former president and presumptive GOP candidate for 2024, has largely overlooked the shortfall.

The housing shortage has caused a record number of renters to devote an excessive amount of income to housing, according to a Harvard University analysis. Not enough homes are for sale or under construction, keeping prices high. Average mortgage rates have more than doubled and made affordability even worse.

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In fact, the Census Bureau reported that homeownership fell slightly at the end of last year in an otherwise solid economy. If it weren’t for housing costs, inflation — Biden’s most pronounced economic issue — would be running at a healthy and steady 1.8 percent. Instead, it hovers around 3.2%.

Administration officials are confident that shelter inflation will cool soon, but the damage over many years is clear to advocates and economists.

Currently, average rates are around 6.74%. If it fell closer to 6%, the odds of a Biden victory would increase. But rates hovering near 8 percent could allow Trump to prevail, Zandi said.

Biden, a Democrat, acknowledged the pain felt by many in his State of the Union address earlier this month and in his budget proposal released Monday.

The president wants to fund the construction and preservation of 2 million housing units — a significant amount, but not enough to solve the shortage. He also proposed a tax credit of up to $10,000 for home buyers. In the past three years, he has increased rental assistance to 100,000 households.

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“The bottom line is we have to build, build, build,” Biden said Monday in a speech at the National League of Cities. “This is how we permanently reduce housing costs.”

Lower rates might play well with voters, but most economists say they would provide temporary financial relief at best. Purchase prices would likely adjust upward in response to higher demand due to lower rates.

Construction, the more sustainable solution, would take years to accomplish and require new rules by states and cities. The administration is trying to push for zoning changes, but major elections are beyond the White House’s control.

The rule of thumb is that people should pay no more than 30% of their income on rent or mortgage. A typical household looking to buy a home would need to dedicate 41% of their income to mortgage payments, according to Redfin.

The Associated Press contributed to this report. This story was reported from Los Angeles.