Home prices could play a subtle but important role in the 2024 presidential election, according to a recent first-of-its kind study.
The academic study, Housing Performance and the Electorate, analyzed home prices and election results at the county level for each of the six presidential elections from 2000 to 2020.
The authors found that local home price performance significantly affects voting in presidential elections at the county level. Counties with superior gains in home prices in the four years preceding an election were more likely to “vote-switch” to the incumbent party’s presidential candidate.
Conversely, counties with relatively inferior home price performance leading up to an election were more likely to flip their vote to support the candidate challenging the incumbent party.
In other words, quickly rising home prices tend to favor the incumbent president’s party, whether it be the Democrats or Republicans. The study found that the relationship is strongest in the years closest to an election, and that home prices were most influential in the small group of “swing counties” with a history of switching party preference.
University of Alabama Associate Professor of Finance Alan Tidwell, one of the study’s co-authors, explains that the logic driving this trend is simple: For most voters, their home represents their single largest asset.
“People feel more financially wealthy if they have a lot of housing equity, relative to lower housing equity,” he says. “How financially wealthy they feel really impacts their sense of financial and economic well-being.”
For the upcoming presidential election, the new finding suggests the outcome could be partly influenced by home prices in swing counties of the seven battleground states: Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania, and Wisconsin.
“In the swing counties, they care about this economic factor most, and real estate is one of the main drivers of household wealth,” says lead author Eren Cifci, an assistant professor of finance at Austin Peay State University in Tennessee. “So there may be many other factors that affect how people vote, but this definitely appears to be one of the factors influencing voters when they make their decisions.”
Explaining the ‘homevoter hypothesis’
The study’s finding is an extension of the “homevoter hypothesis,” which holds that homeowners tend to vote in support of policies and candidates they believe will boost their home values.
While that phenomenon is well documented in local politics, where government policies have the clearest impact on home values, the new study is the first to show evidence of homevoter behavior in national elections.
The term “homevoter” was coined in 2001 by William A. Fischel, a now-retired economics professor at Dartmouth College and expert in local government and land use regulation.
Fischel conceived the homevoter hypothesis while serving on the local zoning board in Hannover, NH. Regularly, he would hear objections and concerns about zoning changes that seemed esoteric, and noticed that the complaints were always from homeowners.
Fischel says he came to realize that homeowners are essentially shareholders in their community, similar to owners of stock in a company—but that unlike corporate shareholders, they cannot easily diversify their portfolio or liquidate their holdings.
“It’s people who are voting their homes, and that’s actually an old concept in economics,” says Fischel. “But also, they’re very risk-averse, because so much of their assets are stuck in one stock, in one place.”
Fischel says he was surprised by the recent study linking home prices and voting in national elections, since he had always viewed homevoting as primarily a local phenomenon.
“I can see, a little bit, what a presidential election might mean for home values. But it’s so indirect, I was really quite surprised at the strength of the evidence,” he says. “How did they find such a strong mechanism? But I have no reason to doubt their evidence.”
For his part, Tidwell argues that the economy plays a major role in most presidential elections, and that rising home equity has a significant impact on how voters perceive the strength of the economy.
Even if local policies, such as zoning laws and public school funding, have a bigger direct impact on local home prices, national elections are where more voters take the opportunity to weigh in with their concern or satisfaction, he says.
“Local elections don’t have big turnout, and they don’t have big visibility, whereas the national election has a whole bunch more turnout and a whole lot more national media exposure, especially with talk of the economy,” says Tidwell.
Home prices play the biggest role in swing counties
To conduct their study, Cifci and Tidwell, with co-authors Sherwood Clements and Andres Jauregui, looked at the voting results for every county in the continental U.S. over the past six presidential elections.
Of those counties, 77% never changed their party preference, voting for either the Democrat or the Republican in every election since 2000, which was used as the base year for analyzing the 2004 election.
But 641 counties across the country–or 23%–switched their party vote at least once across the survey period, some as many as four times. In that subset of swing counties, home prices appeared to have the biggest impact on election results, according to the study.
In swing counties, for every 1% increase in home values over the four years preceding an election, the county was 0.36% more likely to vote for the incumbent party in the next election, the study found.
As well, the data showed that each 1% increase in home prices made the county 0.19% more likely to “flip” its vote to the incumbent party’s candidate. Those figures are after the study controlled for a variety of other factors that could sway elections, such as changes in demographics, the economy, and government benefits.
“The larger the return [on home values], the more likely you are to vote for the incumbent, or to flip for the incumbent,” explains Tidwell. “For every percent of positive return, there is a percentage increase in voting for the incumbent.”
What does it mean for 2024?
Home prices have risen rapidly across the country over the past four years, including in the seven swing states.
From March 2020 to March 2024, national home values rose 46.4%, according to the Freddie Mac Home Price Index. Of the swing states, North Carolina, Arizona, Georgia, and Wisconsin all outperformed the national average, with four-year price gains greater than 50%.
The study suggests that trend would tend broadly to favor the incumbent, President Joe Biden, as he seeks reelection, particularly in the areas that have seen the strongest home price gains. But the authors caution that their finding only demonstrates a statistical nudge in one direction or the other. They warn that there are many other variables at play in an election.
“It’s just one of many factors,” Tidwell says of home price performance. “It’s not really a forecast on its own.”
As well, voter turnout in counties that are reliably Democratic or Republican can be just as important to the state-level results in swing states as the marginal shifts in counties that flip from one party to another.
But in an election that is increasingly focused on the housing market, the new findings provide an interesting twist on the role of home prices in voter decision-making.
Donald Trump, the presumptive Republican nominee, and his allies have recently levied attacks against Biden over rising home prices, pointing to the challenges raised for prospective first-time homebuyers.
“Under President Biden, home prices have risen almost 50%, making it nearly impossible for millennials to buy their first home and driving the American Dream further and further out of reach,” wrote Sen. Tim Scott, a South Carolina Republican and staunch Trump supporter, on the social media platform X.
On his own Truth Social platform, Trump himself recently wrote: “Crooked Joe has made it impossible for millions of Americans, especially YOUNG Americans, to buy a home.” (Conversely, Trump has also accused Biden of trying to “destroy your property values” by abolishing single-family zoning in the suburbs. The two arguments seem difficult to reconcile.)
It’s true that rising home prices, along with high mortgage rates, are key factors in a national housing crisis that has pushed ownership out of reach for many prospective homebuyers. But on the flip side, most voters are already homeowners. The U.S. homeownership rate is about 66%, and homeowners are significantly more likely to vote than renters.
For existing homeowners, rising home prices mean more equity and higher household net worth, the same as what rising stock prices mean for shareholders.
It suggests that for Republicans, attacking Biden over rising home prices might not carry the same weight with voters as criticism over inflation for goods such as gasoline and groceries.
“When you go to the grocery store or restaurant or the gas pump, I think maybe people feel a little bit different pain than if they own a house and they see their house price going up,” says Tidwell.
On the other hand, the study found evidence that, for swing counties, the economically rational choice might be to always flip to the non-incumbent party, which in 2024 would be the Republicans.
The study found that counties that flipped their vote to an incumbent party candidate were not rewarded with superior home price returns in the four years after the election.
However, counties that flipped to vote for the non-incumbent did experience “positive and significant post-election housing returns” if that candidate won. The authors speculate that this might be due to the winning party rewarding new supporters by increasing investment in those areas after regaining the White House.
“The counties that make the national results flip parties, they do well,” says Clements, a collegiate assistant professor of real estate at Virginia Tech. “Whatever counties voted for Biden last time and vote for Trump this time, if you believe our research, they’re going to have home prices rising if Trump wins.”
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