In Swing States, Typical Homebuyer’s Monthly Payment Has Nearly Doubled Since The Last Presidential Election

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

SEATTLE--(BUSINESS WIRE)-- (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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240716725548/en/

Redfin Journalist Services:
Angela Cherry
press@redfin.com

Source: Redfin

Released July 16, 2024