High home prices in swing states could help Biden in presidential election, study finds

The study, “Housing Performance and the Electorate,” analyzed home prices and election results in every county in the continental U.S. during each of the last six presidential elections. What he found was that swing counties where home prices rose significantly in the four years leading up to an election were more likely to vote for the incumbent candidate, while counties with worse price performance were more likely to vote for the incumbent. lean towards the challenging party.

The results offer insight into how home prices could influence this year’s presidential race at a time when national home values ​​have risen more than 45% compared to four years ago, according to Index data Freddie Mac Home Price Index.

“People vote based on economic well-being,” said Alan Tidwell, co-author of the study and associate professor of finance at the University of Alabama. Fortune. While there are many factors that influence this metric, Tidwell and his co-authors “thought that America’s largest asset class, residential real estate, should be a significant factor that could affect which direction voters choose at the polls.” “, said.

Between 2000 and 2020, 641 U.S. counties, or 23% of all counties, changed the party they voted for at least once, according to the study. In those “swing counties,” every 1% increase in home values ​​during the four years before an election correlated with a 0.36% increase in the probability that they voted for the incumbent.

Even if a county had not voted for the incumbent in the previous election, a 1% increase in home prices increased the probability that they would flip their vote to the incumbent in the next election by 0.19%.

The relationship between house prices and voting behavior was stronger if house values ​​rose more in the final year before an election, the study found, and high prices were even more favorable to parties in power. if they presented a repeat candidate.

Eren Cefci, lead author of the study, said they chose to focus on swing counties in particular because their voting behavior was the most sensitive to changes in home values.

“We found that 77% of the time, counties do not change their voting over the six election periods,” said Cefci, an assistant professor of finance at Austin Peay State University. Fortune. “They vote for the same party regardless. . . so that they do not react to economic factors.”

Of the seven states considered in play in the 2024 race, four (North Carolina, Georgia, Wisconsin and Arizona) saw home prices rise faster than the national average over the past four years. In Georgia and North Carolina, prices have increased more than 60% since 2020.

Taken alone, the study results suggest that rising home prices over the past four years could favor Biden in swing counties come November. But Cefci cautioned that the findings are just one benchmark among many when it comes to how voters think about the election and the economy in general.

“If people are happy with (the value of their homes), they could reward the ruling party for it,” he said. “But there are many other factors that must be taken into account.”

To be sure, in a historically unusual economic recovery, it remains to be seen whether the good fortune of homeowners will offset the pessimism of almost everyone else. Less than 40% of Americans believe Biden will do the right thing for the overall economy, according to a Gallup poll released this month. For the second year in a row, a record low 21% of respondents said it was a good time to buy a home, according to the same survey, while 70% expect prices to continue rising.

Overall, high home prices have meant more bad news than good news for Biden. Potential homebuyers need to earn about $50,000 more to afford a home than before the pandemic, and the country is short between 2 million and 7 million homes, keeping prices high. In a study commissioned by Redfin this year, nearly two-thirds of homeowners and renters said housing affordability made them feel negatively about the economy.

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