The data on the intersection between housing issues and politics is clear: Housing is an issue that resonates strongly with young voters in 2024, but high mortgage rates and high home prices are likely to be issues for years to come. That’s according to a report released this week Politico.
The latest data on housing market attributes – including existing and for-sale homes, mortgage rates and home prices – do not paint a rosy picture of the housing market for new entrants. Subject matter experts are taking notice.
“Home sales activity is at a 30-year low and has basically stayed there, so all economic activity related to home sales is at a subdued level,” said Lawrence Yun, the firm’s chief economist. National Association of Realtors (NAR) to the exit.
Pricing appears to be young voters’ biggest concern, according to survey redfin tuna Chief Economist Daryl Fairweather. But federal measures haven’t made much headway on the issue because policies at the local, county and state levels often determine price changes more than federal policy.
“This is unprecedented, there has never been a problem like this,” Fairweather told Politico. “I think this is the first time housing has really made a difference in swing states — it was mostly on the coasts before.”
Fairweather added that the importance of housing was evident during the recent U.S. presidential debate, with President Joe Biden immediately mentioning that housing would be a priority if elected to a second term.
Fairweather added that inventories are climbing, but not fast enough to address supply issues that have been present “for years.” Part of this is due to the impact of the mortgage rate lock-in effect, where borrowers who would otherwise be willing to move and sell are incentivized to maintain the lower mortgage rates they obtained in 2020-2021.
“It’s really hard for the housing market to get out of this panic because of the mortgage rate lock-in effect,” she told Politico. “I don’t think the problems in the housing market are going to be solved in a few years. It could take a decade.
The Biden administration has announced a series of housing measures over the past year aimed at expanding access to the market, most recently including a new grant program, investing $469 million in renovations and expanding the availability and funding of housing counseling.
Senior economist Orphe Divounguy said prices had fallen back but were still at historically high levels. Zillo to politics.
“I think the situation is much better now than in 2022, when price growth was unsustainable,” Divounguy said. “An overheating pace could lead to a collapse, which is why the Fed must act.”
Meanwhile, meaningful interest rate declines will take longer to occur.
