How the Housing Cost Crisis Is Hurting Harris and Trump’s Campaigns

In recent years, the housing crisis has emerged as one of the biggest challenges facing the United States, making it one of the most pressing issues that American voters are looking to White House candidates to solve.

This competition is not just a duel between two political figures, but rather a confrontation between two different visions for the future of housing in the United States.

In the past five years, U.S. home prices have risen 50%, while rents have risen 35%, according to real estate firm Zillow.

Housing Crisis

Home prices in the United States have risen to an unprecedented level, with the average home price in 2023 reaching about $420,000, a massive 30% increase compared to pre-pandemic prices in 2019.

Owning a home has been one of the biggest challenges facing American families over the past decades due to rising costs, which pushes them to rent.

However, rental prices have also risen dramatically, with cities like New York and San Francisco seeing rents rise by 20 to 40% over the past five years.

The rise in rents means that in a swing state such as Arizona, a yearly income of almost $70,000 is needed to afford a two-bedroom apartment, according to the National Low Income Housing Coalition. That is nearly double the median annual income of $37,209.

While the average monthly rent for a one-bedroom apartment in New York has reached around $3,500.

Meanwhile, the United States is facing a severe shortage of housing supply, with reports suggesting that the country needs between 3.8 million and 6.8 million new homes to overcome the current shortage, which has led to continued increases in prices and rents.

Mortgages also make up a large part of household budgets. According to a study by mortgage lender Fannie Mae, about 35% of American households spend more than 30% of their income on housing.

While the Federal Reserve is expected to begin cutting interest rates from their highest levels in 23 years next month, its two-year effort to curb inflation has put homeownership out of reach for many Americans.

In the most recent consumer price index report, the cost of housing-related expenses accounted for almost 90% of the inflation recorded during July.

Housing costs rose 5.1% over the past 12 months, compared with overall inflation of 2.9%, according to the Bureau of Labor Statistics.

These figures combined put the housing issue at the top of the list of concerns for voters who are waiting for Democratic candidate Kamala Harris and her Republican rival Donald Trump to find effective solutions to it.

A recent poll released in early 2024 revealed that 57% of renters believe that the American Dream of owning a home is dead, and only 16% of homes listed for sale in 2023 were affordable for average American families.

According to a poll by the progressive Center for Popular Democracy, 84% of voters in swing states say the cost of housing is a major issue.

Election Promises

US Vice President Kamala Harris’s campaign has unveiled a new ad highlighting her plan to reduce housing costs and end the housing shortage, in an effort to win the votes of average American families.

This comes as the number of Americans evicted from their homes, known as foreclosures, has increased significantly in many states in 2023 due to their default on loans and installments, prompting American banks to repossess homes and put them up for sale again through auctions.

Bank lenders have started foreclosure activities on more than 270,000 homes, an increase of 9%, led by the states of California, Texas and Florida.

Owning a home has become an unattainable goal for many American families, according to Kamala Harris, who vowed to crack down on corporate landlords who buy homes and rent them out at high prices, without considering the impact on citizens.

Harris also promised a series of tax breaks for investors with the aim of stimulating the construction of three million housing units within four years, and renting them to Americans at affordable prices.

In addition to expanding the low-income housing tax credit, providing incentives for state and local investment in housing, and creating a $40 billion tax credit to make affordable projects economically viable for builders.

It is noteworthy that the total number of new housing units completed in the country last year amounted to 1.45 million homes, according to the US Census Bureau.

Harris also proposed helping first-time buyers, by offering a tax credit of up to $25,000 for first-time buyers, to help them pay the costs of the down payment and closing costs of the purchase.

Donald Trump had opened up a polling lead over Biden on the economy, capitalizing on anxiety about inflation and high living costs. 

Harris is now closing that gap, but the Republican candidate is still trying to pin inflation on her, while pledging his plans to drive down costs.

The 2024 Republican platform pledges to allow new home construction on federal lands, and like Harris would also offer tax relief for first-time buyers.

On the other hand, Trump has promised to lower housing costs by stopping the influx of illegal immigrants, who he believes are a major part of the housing cost crisis.

He also asserted that he had a real plan to beat inflation and lower mortgage interest rates.

Trump’s housing policies during his first term were generally known to have focused on removing federal building restrictions, providing tax incentives, and increasing private sector participation in housing development.

Although Trump made his reputation as a real estate developer, data shows that there was a shortage of available housing during his presidency (2016-2020).

That shortage became more problematic when inflation jumped as the country recovered from the pandemic and faced higher food and energy costs after Russia’s invasion of Ukraine. 

Mortgage rates climbed to levels that were prohibitively high for many would-be buyers. At the same time, many existing homeowners held off on listing their properties for sale in ways that compounded the inflation challenge.

In turn, Washington-based activist Omar Taha explained in a statement to Al-Estiklal that “the difference between the presidential candidates is that Harris wants to provide affordable housing for people while keeping the income level limited, while Trump is working to raise income levels in order to support their financial ability to obtain suitable housing at market price.”

“If Harris is elected, her plan will face a major battle in Congress from the Republicans, in addition to other battles at the state level, which may hinder the implementation of her promise before 2028,” he said.