Yahoo Finance Red vs. Blue vs. Swing States: Where Have Home Prices Skyrocketed the Most Since the 2020 Election?
The 2020 election happened to occur amid the coronavirus pandemic. The U.S. was emerging from a short but sharp recession, and housing prices, which fell initially, began a multi-year boom that propelled much of the market into the “unaffordable” category. But not every state in America saw the same cost of living spike.
While housing price movements are not dictated by politics, it’s still an interesting exercise to analyze whether red, blue or swing states have seen the most dramatic price appreciation since the 2020 election. With the 2024 election only months away, the level of housing unaffordability may play a role in the 2024 election, as frustrated would-be homeowners may assign blame for runaway housing prices to politicians. This is particularly true in the swing states, where voters will have the most impact in determining who the next president will be.
Find Out: I’m an Economist: Here’s My Prediction for the Housing Market If Trump Wins the Election
Explore More: 7 Reasons You Must Speak to a Financial Advisor Before Spending $50,000 or More
In fact, according to a recent survey conducted by Redfin, more than 90% of adult Gen Zers say housing affordability is an important factor in terms of who they will vote for in the upcoming presidential election, making it a top issue for voters of that generation.
With that in mind, here’s a look at how much housing prices have gained since 2020, according to Redfin, broken down by red states vs. blue states vs. swing states.
Earning passive income doesn't need to be difficult. You can start this week.
Blue States
Blue states have higher average home prices than red states or swing states, so the gains in monthly payments have been the most dramatic in these regions. In fact, according to The Guardian, housing values in blue states amount to 77% of the total value of all homes in the United States.
The average monthly housing cost in blue states is now at a record $3,311, up 83% since 2020. While spiking home prices have been a contributing factor, the rise in interest rates from a record low of 2.65% at the start of 2021 to 6.89% currently has also played a major role.
Check Out: I’m an Economist: Here’s My Prediction for Social Security If Kamala Harris Wins the Election
Red States
The average monthly housing payment in red states has gone up even more dramatically than in blue states, jumping 95% to an all-time high of $2,161. Affordability has fallen significantly as well. In 2020, a household earning the median red-state income would have spent 21.4% of their income on housing costs, but by 2024, that had jumped to 32.9%.
Swing States
For purposes of this analysis, the swing states are considered to be Arizona, Nevada, Wisconsin, Michigan, Pennsylvania, Georgia and North Carolina. Swing states are probably the most important in terms of this analysis because they will play an outsized role in determining who will win the 2024 presidential election.
In swing states, the median home sale price has risen by 40%, to a record high of $316,063 as of 2024. But the median housing payment has nearly doubled, rising 92% to an all-time high of $2,161. This is due, in part, to the spike in home prices, but primarily due to the near-doubling of mortgage interest rates over the same period.
Perhaps most importantly, this means that the average home in the swing states has gone from affordable to unaffordable for the typical American family. The average median income for a household in a swing state is $79,155, up just 28% since 2020. That’s over the same time that housing costs have risen by 92%. Thus, to afford the average home, a family would have to spend 32.8% of their earnings, up from just 21.8% back in 2020.
Looking at the situation through another lens, just 35.1% of houses in swing states are now affordable to the average household. This is down from 65.5% in 2020.
What Does It All Mean?
The housing market is not controlled by politicians — rather, it is more a function of supply and demand, interest rates, inflation and other macroeconomic factors. However, politicians often take the blame when housing prices become unaffordable. As the 2024 election looms, the current affordability crisis in the housing market may very well influence certain voters, such as the 90%-plus of Gen Zers who consider it an important factor.
As to which political party voters may assign responsibility for high housing prices and mortgage rates, that remains to be seen. President Donald Trump was in the White House both during the initial stages of the pandemic, which reached the level of a global crisis in March 2020, and during the initial spike in housing prices at the end of 2020. But after President Joe Biden was inaugurated in January 2021, prices continued to climb, to the point where housing prices and monthly payments reached record highs.
Another factor to consider is that the rise in home prices hasn’t been all bad. While those who have been trying to get into the market have been continually frustrated as prices continued to soar, those who bought into the market in 2020 or earlier now have a sizable amount of equity in their homes. This could also influence voters, who may feel that the past four years have brought them a tremendous amount of personal wealth.
More From GOBankingRates
Mechanics Explain Why You Should Never Buy These 6 Popular Car Brands
9 Things the Middle-Class Should Consider Downsizing To Save on Monthly Expenses
This article originally appeared on GOBankingRates.com: Red vs. Blue vs. Swing States: Where Have Home Prices Skyrocketed the Most Since the 2020 Election?
