Rent and home prices are through the roof. Harris and Trump each say they have the answer

By CNN Newsource

Published November 2, 2024 6:00 AM

By Samantha Delouya, CNN

(CNN) — Home-building policy, local zoning restrictions and the use of federal lands don’t usually find their way into the world of flashy presidential campaign politics, but both Vice President Kamala Harris and former President Donald Trump have prioritized those topics as the election draws to a close.

That’s because housing has emerged as a top concern for voters. Although recent data has painted a picture of a flourishing US economy, housing affordability remains a weak spot, stressing voters and prompting both candidates to spotlight the issue.

“It’s not lost on the campaigns the degree to which people are increasingly concerned about the issue,” said Jim Parrott, a nonresident fellow at the Urban Institute and a former senior advisor at the National Economic Council. “Housing affordability has risen as a source of angst for Americans over the last two years.”

Affordable housing has drifted ‘beyond reach’

Twenty-four percent of likely voters who rent their homes said that “the cost of housing” is the most important economic issue they’re considering as they decide their vote, according to a CNN poll conducted by SSRS between September 19 and 22.

That’s no surprise: The US is facing a once-in-a-generation housing affordability crisis. In the four years through August 2024, national home prices have risen 45%, according to the S&P CoreLogic Case-Shiller Home Price Index. According to the National Association of Realtors, the median sales price of a home in the US hit a record high this summer and now hovers just below that level.

In swing states, median home sale prices have jumped nearly 40% since 2020, an October Redfin analysis found. That includes Arizona, Nevada, Wisconsin, Michigan, Pennsylvania, Georgia and North Carolina.

Elevated prices coupled with persistently high mortgage rates (currently just below 7%) have created a “brutal double whammy for folks,” Parrott said.

“For many people, access to homeownership feels like a really critical entryway to the middle class and upwards,” he added. “To have that drift beyond your reach, it resonates negatively in a way that a rise in the price of other goods and services might not.”

Nor has renting become any easier than buying. Nearly half of US renters spend more than 30% of their income on housing, qualifying them as “cost-burdened,” according to US Census data from September.

Where the candidates stand on housing

A chronic undersupply of homes has helped catapult prices to near-record highs. During the pandemic, more people wanted to move to bigger spaces, intensifying the issue. That shortage also affects rent prices.

A May report from Freddie Mac estimated that America needs to build an additional 1.5 million homes to ease the pressures on the housing market, but some experts say the true number may be even higher.

Harris and Trump differ in their plans to tackle the issue.

In August, Harris unveiled a multi-pronged plan to lower housing costs. One provision promises up to $25,000 in down-payment support and a $10,000 tax credit for first-time home buyers.

Harris also proposes partnering with the private sector to build 3 million new housing units. Harris said she would provide a first-ever tax incentive to specifically encourage home builders to build starter homes for first-time buyers.

The plan also includes two main proposals to lower rent costs. One would block landlords from using algorithm-driven price-setting tools to set rents. The second would remove key tax benefits from investors and corporations who buy up large numbers of single-family homes.

Both plans to lower rent would be subject to congressional approval, meaning that the measures may be difficult to pass even if Harris wins the presidency.

Unlike Harris, Trump has not rolled out a formal housing plan, but he has tied plans to deport undocumented immigrants to housing. Trump has blamed them for driving up the cost of housing and has said he would ban them from getting mortgages.

Both Trump and Harris have promised to repurpose some federal land for affordable housing.

At a September speech at the Economic Club of New York, Trump said he would make the federal land zones “ultra-low tax and ultra-low regulation.”

In the same speech, Trump also promised to remove regulations for home builders that he said has driven up housing costs.

Trump also said falling interest rates would help reduce mortgage rates.

“We’re going to get them back down to, we think, 3%, maybe even lower than that, saving the average home buyer thousands of dollars per year,” he said. However, mortgage rates generally track the 10-year US Treasury yield, which presidents do not directly control.

Trump’s official 2024 policy platform also promises to “promote homeownership through Tax Incentives and support for first-time buyers.”

Most Americans already own a home

Not everyone is lamenting the recent jump in home prices, though. Rising home values have padded the net worth of the majority of Americans who already own homes.

According to data from the Federal Reserve, 64% of American adults owned homes in 2023, but homeownership was less common among lower-income adults. Thirty-six percent of adults who made less than $50,000 owned their home, compared to an 87% homeownership rate among adults with a family income of $100,000 or more.

CNN’s September poll conducted by SSRS found that only 8% of voters who already own a home say “the cost of housing” is the most important economic issue they’re considering as they decide to vote for president.

“I was lucky enough to lock in a 2.7% interest rate by refinancing the already-low mortgage rate that I took out in 2018,” Nick Pappas, a Kansas resident, recently told CNN. “Housing is not something I’ll be considering when voting this year.”