America’s attitude toward housing affordability will determine whether Congress treats housing as a priority or another issue to be skipped during election cycles.
Housing affordability is no longer just an economic issue. This is political, and I predict that it will motivate parliamentary elections in a way that cannot be ignored by our representatives.
Only 17% of voters said now is a good time to buy a home, compared to 69% of voters in 2013. End point; pause.
More than a market correction, buyer confidence has fallen (and failed to recover) and remains near historic lows. At the same time, 85% of voters still say homeownership is the foundation of the American Dream, up from 79% in 2013. The gap between what Americans think they should have and what they think they can actually afford has never been wider. What we need is a life alert to help us realize the American Dream.
flash point
This disconnect is the flash point. According to a National Association of Realtors survey conducted Jan. 12-14, “Affordable housing availability and home prices rank among the most important issues for voters when deciding how to vote for Congress.” That is the basis of political speech.
Fifty percent of voters say current federal policies make it harder to buy a home, but only 9% say those same policies make it easier to buy a home.
When we see such widespread unanimity in today’s environment, there are unifying issues and political vulnerabilities. This is not left versus right. This is our American dream and our expression.
blocked
House prices and mortgage interest rates are high. Wages are not keeping up with housing costs. Economic uncertainty and inflation create hesitation. Limited inventory, especially affordable and entry-level housing, means people have nothing to buy even if they could afford it. Investor activity is in direct competition with first-time buyers for scarce supply.
Existing homeowners are also stuck. Almost half (46%) of homeowners say at least one major barrier is preventing them from moving. Many people cannot afford to give up the low mortgage rates they were previously locked into.
Some people want to sell, but the capital gains tax is prohibitive. Still others look around their neighborhood and can’t find an affordable option to move. They could simply sell for $1.2 million and buy a similar home for $1.5 million, effectively locking them in.
This creates secondary market failure, or inventory stagnation. If homeowners are unable or unwilling to move, inventory remains limited. If inventory is limited, prices will remain elevated. If prices remain high, first-time buyers remain locked out. This is a vicious cycle that no individual actor can break alone. It requires systematic policy intervention.
Congress has the tools.
Here’s what surprised me most about this data. Voters aren’t looking for radical solutions. They want smart people.
They support allowing tax-free savings for down payments (84%). They support the proposal for a one-time home sale without capital gains tax (76%). They want to expand the capital gains tax threshold for home sales (67%). They support creating incentives for investors to sell homes to first-time buyers (71%). They support requiring affordable rental units through tax incentives (71%).
What is surprising is that this support is bipartisan. This is not a partisan impasse. Republicans, independents, and Democrats all support these proposals with equal strength. In today’s environment, if you can get 84% agreement on a policy question, you are moving closer to national consensus.
According to the survey, 64% of voters said it would be easier to buy and sell a home if new housing proposals were passed. That’s where the political opportunity lies. Voters believe Congress can solve this problem. They believe the tools exist. What they don’t believe is that lawmakers have the will to deploy them.
political moment
In my 20 years of work advising local governments, investors, and developers, one lesson applies to politics as well. If your constituents say they want action and you believe you can do it, that’s permission and obligation.
The next Congress will be inaugurated with a clear mission. Housing affordability is a voting issue, and voters believe it can be solved. The proposal, which has 67% to 84% support, is not an unusual idea. These are common-sense policy adjustments that will expand supply, reduce costs, and help families move into housing.
What happens next will determine whether Congress treats housing as a priority or just another issue to be sidelined during the election cycle. Based on political calculations, the choice should be clear. But as anyone who has ever worked in government knows, the obvious and “real implementation” is ships that sail at night.
The ball is in the court of Congress. Voters said what they wanted to say. The only question is whether lawmakers will listen or prove that half of the voters who say federal policies are making things worse were right all along.
America Foy is a broker associate at The Grubb Co. Connect with him on LinkedIn and Instagram.
