Just over one-third of all homes listed for
sale in swing states so far this year were affordable to a
household earning the median income, down from two-thirds in
2020
(NASDAQ: RDFN) — The median monthly housing payment for
homebuyers in swing states has nearly doubled since the 2020
presidential election, rising 92% to an all-time high of $2,161, as
both home prices and mortgage rates have soared. This is according
to a new report from Redfin (redfin.com), the technology-powered
real estate brokerage. Housing costs have also skyrocketed in red
and blue states since 2020: Homebuyers’ median housing payment has
risen 95% to a record $2,066 in red states and 83% to a record
$3,311 in blue states.
Redfin’s report is based on its analysis of housing-market data
and incomes for blue, red and swing states, from 2016-2024. The
data is annual for 2016-2023; the 2024 data includes January
through May. The report focuses primarily 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. Redfin considers this year’s
swing states to be Arizona, Nevada, Wisconsin, Michigan,
Pennsylvania, Georgia and North Carolina.
The median home-sale price in swing states has increased nearly
40% since 2020, reaching a record high of $316,063 in 2024. The
average mortgage rate is currently 6.89%, more than double the
record low of 2.65% at the start of 2021—intensifying affordability
challenges even further.
Typical swing-state home has gone from affordable to
unaffordable for the average family since the 2020 election
The steep increase in prices and mortgage rates has made the
median-priced home ($316,063) unaffordable to the typical
swing-state resident, using the rule of thumb that a household
should spend no more than 30% of their income on monthly housing
costs.
A household earning the median swing-state income ($79,155)
would spend 32.8% of their earnings to afford the typical home;
back in 2020, that same household would have had to spend a much
smaller share of their income (21.8%) on the typical home.
The affordability trajectory in red states has been very similar
to that of swing states. A household earning the median red-state
income would spend 32.9% of their income on the median-priced home,
up from 21.4% in 2020. In blue states, a household earning the
median income would spend 41.3% of their income on the
median-priced home, up from 28.6% in 2020.
A swing-state family must earn $86,421 if they want to spend no
more than 30% of their income on payments for the median-priced
home. That’s nearly double the $45,140 they needed to earn in
2020.
Just one-third of swing-state listings are affordable to the
typical family, down from two-thirds in 2020
To look at affordability another way, just over one-third
(35.1%) of all homes listed for sale in swing states so far this
year were affordable to a household earning the median income, down
from two-thirds (65.5%) in 2020.
In red states, just over one-third (36.6%) of listings are
affordable on the median income, down from 69% in 2020. In blue
states, just one-quarter (25.2%) of homes are affordable on the
median income, down from half (50%) in 2020.
Housing affordability is a major factor in this year’s
presidential election
More than nine in 10 adult Gen Zers say housing affordability is
important when deciding who to vote for in the upcoming
presidential election, making it a top issue for voters of that
generation, according to a Redfin-commissioned survey fielded in
February. While several other topics have since risen to the
forefront of election news—including President Biden’s age, an
assassination attempt at a rally for Donald Trump and the
announcement of Trump’s running mate—housing affordability is a
mainstay in politics because it directly impacts nearly everyone in
the country.
“Voters in swing states care about housing affordability because
soaring home prices and mortgage rates, along with a shortage of
homes for sale, have made homeownership feel impossible for some
Americans. 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,” said Redfin Senior Economist Elijah de la
Campa. “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.”
The flip slide of rising housing costs is that it also means
home values are rising, which is a boon to homeowners’ pocketbooks.
The average U.S. homeowner has seen their home’s value increase
significantly over the last several years, which means many of them
are holding a lot of wealth via housing equity. Still, at least 80%
of millennials, Gen Xers and baby boomers—who are more likely than
younger Americans to own a home—said housing affordability will
factor into their vote in the upcoming presidential election.
That’s partly because some people who already own homes would like
to move up to a bigger or better home, but are unable to do so
because the increase in housing costs has outpaced the increase in
their equity, and because mortgage rates have risen so much they’re
reluctant to give up their low rate.
President Biden has released a plan to lower housing costs.
Donald Trump has said he has a strategy to combat the expensive
housing market.
Homes have become unaffordable in swing states—and red
and blue states—because housing costs have increased faster
than incomes
Housing costs have skyrocketed faster than incomes mostly
because of the pandemic-fueled homebuying frenzy: Remote work and
ultra-low mortgage rates in 2020 and 2021 drove up demand, which
pushed up prices. Homebuying demand was especially strong in Sun
Belt swing states at the height of the pandemic: Phoenix, Atlanta,
Las Vegas and Charlotte, NC, were all among the 10 U.S. metros that
gained the most residents in 2021.
Now, high mortgage rates and a shortage of homes for sale are
driving up costs even more.
Typical Black family would have to spend half of their income
to afford a home in swing states
It’s more difficult for Black and Hispanic families to afford
homes in swing states than it is for white and Asian families.
A family earning the median swing-state income for Black
households would spend nearly half (48.2%) of their earnings to
afford the typical home; back in 2020, that same household would
have spent 32.7% on the typical home. The typical Hispanic family
in a swing state would spend 38.3% of their income on the
median-priced home, up from 26.8% in 2020.
The typical home is affordable to median-earning white families
in swing states, but just barely: They’d spend 29.8% of their
earnings on a home, up from 19.8% in 2020. Asian families would
spend 24.8% of their income, up from 16.7% in 2020.
Housing costs also increased substantially between the 2016
and 2020 elections
This isn’t the first time housing affordability has been an
issue in a faceoff between Biden and Trump. Home prices had already
soared in advance of the 2020 presidential election, partly because
the pandemic housing boom had already begun.
The median home price in swing states increased 40% from 2016 to
2020. It increased by 27% in blue states, and 28% in red
states.
To view the full report, including charts and methodology,
please visit:
https://www.redfin.com/news/swing-state-housing-affordability-2024
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate
company. We help people find a place to live with brokerage,
rentals, lending, title insurance, and renovations services. We run
the country's #1 real estate brokerage site. Our customers can save
thousands in fees while working with a top agent. Our home-buying
customers see homes first with on-demand tours, and our lending and
title services help them close quickly. Customers selling a home
can have our renovations crew fix it up to sell for top dollar. Our
rentals business empowers millions nationwide to find apartments
and houses for rent. Since launching in 2006, we've saved customers
more than $1.6 billion in commissions. We serve more than 100
markets across the U.S. and Canada and employ over 4,000
people.
Redfin’s subsidiaries and affiliated brands include: Bay Equity
Home Loans®, Rent.™, Apartment Guide®, Title Forward® and
WalkScore®.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
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version on businesswire.com: https://www.businesswire.com/news/home/20240716725548/en/
Redfin Journalist Services: Angela Cherry press@redfin.com
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