Record-low U.S. housing affordability is squeezing homebuyers and renters while threatening to spill into presidential politics.
Milwaukee, the largest city in key swing state Wisconsin, saw affordability deteriorate in its rental market more than almost any U.S. metro area in the year ended July, according to a measure by the National Association of Realtors. The region also recorded one of the greatest increases in mortgage burden among the biggest 50 metros in the past year, data from Zillow show.
The housing situation in Milwaukee, the site of next year’s Republican National Convention, is a version of a scenario playing out in cities across the country: U.S. mortgage rates in August hit the highest level since 2000, which has translated into the fewest home-buying applications in decades. Adding to the pressure is the scarcity of inventory, which has helped push selling prices, as well as rents, to near record-high levels.
Milwaukee’s crunch stands out, though, because housing in the region has traditionally been relatively stable and cheap, and because it has potential for political fallout: Among large metro areas in swing states, it had the greatest decrease in housing affordability in the past year.
That could shape voters’ views of their own prosperity and the wider U.S. economy, creating a political vulnerability for President Joe Biden — especially with young voters, who are hard-hit by declining housing affordability. Biden can ill afford any setback in a state he won by just 20,682 votes in 2020. Philadelphia, another major population center in a closely fought battleground state, is also among the U.S. metros with the largest increases in mortgage burdens last year, according to Zillow data.
“It contributes to a general sense that the American dream is out of reach, and that if the Democratic Party promises a middle-class American dream and it’s failing, then I think those voters are more likely to listen to the Republican Party,” said Wendy Schiller, a Brown University political science professor.
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STRONG TURNOUT
Millennial and Generation Z voters under the age of 45, who comprise an increasingly large share of the U.S. electorate, are disproportionately affected by housing affordability. Exit polls show they voted overwhelmingly for Biden over former President Donald Trump in 2020.
A Pew Research Center survey conducted March 27 to April 2 found that 66% of U.S. adults ages 18-29 were not too confident or not at all confident that Biden can make good decisions about economic policy, and 62% of adults ages 30-49 feel the same way. Polling of Generation Z by SocialSphere Inc. found that the inability to buy a home was their second-largest source of unhappiness.
Biden will need strong turnout from these younger cohorts to repeat his victory in Wisconsin.
The president has touted his efforts to lower housing costs, boost available supply and protect renters, while Republicans have blocked his efforts and haven’t offered their own plans. He’s proposed a “Housing Supply Action Plan” with legislative and administrative actions to help close the U.S. housing supply shortfall in five years.
“President Biden is investing in affordable housing after decades of inaction,” spokesperson Michael Kikukawa said in a statement. “He believes young people deserve to live in a quality home that they can afford to rent or own—that they deserve a fair shot at the American dream.”
And it may help that some voters care more about issues such as climate change and abortion and don’t tie conditions in their local housing market to the policies of national lawmakers.
Still, Republicans see it as a weakness for the president, pointing the finger at him for “killing the American dream of homeownership.”