Home Values In Swing States May Swing The 2024 Presidential Vote

Rising home prices in swing states are set to play an essential role in the 2024 presidential elections, according to a new study from Housing Performance and the Electorate.

Investigating the connection between local real estate markets and political outcomes, the study found that counties with steep increases in home values tend to support the incumbent party, adding a unique dimension to voter behavior in key battleground states such as Arizona, Georgia, and Wisconsin. The trend, most pronounced in counties known for switching party allegiance, indicates the potential for economic factors, particularly personal wealth linked to real estate, to influence election results.

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The relationship between local economic indicators and voter behavior has been historically important, but the study suggests that home prices in particular could be a decisive factor in the upcoming presidential race. Research by Housing Performance and the Electorate found that in swing states, where the political landscape is notoriously fluid, the fluctuation in home prices could indeed sway the electoral results.

In those regions, a positive trend in home values tends to benefit the incumbent party — a phenomenon rooted in the "home voter hypothesis," which hypothesizes that homeowners are more likely to support candidates and policies that maintain or increase their property’s value.

The study suggests that for every 1% increase in home prices in the four years leading up to an election, there is a corresponding rise in support for the incumbent party. The effect is most pronounced in counties with a history of switching allegiances, stressing the potential for real estate trends to influence broader political dynamics.

The logic is simple, says University of Alabama Associate Professor of Finance and report co-author Alan Tidwell; most voters’ largest asset is their home.

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"The larger the return [on home values], the more likely you are to vote for the incumbent or to flip for the incumbent," Tidwell said. "For every percent of positive return, there is a percentage increase in voting for the incumbent."

Eren Cifci, an assistant professor of finance at Austin Peay State University in Tennessee, who led the study, said that while rising home prices reflect economic vitality and can engender a sense of financial well-being among homeowners, they also complicate the landscape for new voters or those looking to enter the housing market.

The disparity in housing equity shapes perceptions of economic success and stability, potentially guiding voting behaviors.

"In the swing counties, they care about this economic factor most, and real estate is one of the main drivers of household wealth," Cifci said. "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."

Specific data points from the Freddie Mac Home Price Index found regional variations that could hint at electoral shifts. For instance, from March 2020 to March 2024, the increase in home values in Arizona reached 53.2%, and Georgia saw a rise of 51.8%, exceeding the national average of 46.4%.

Those states might see an incumbent advantage if the trends indicate broader economic satisfaction among homeowners.

The academic research points out that while home prices are a factor, they interact with many other socioeconomic factors that influence voting patterns. For example, the study controlled for changes in demographics, local economic conditions, and government benefits, shaping electoral outcomes.

Interestingly, the study also highlights a counterintuitive aspect of the homevoter hypothesis. In some cases, counties that experienced lesser growth in home values were more likely to vote against the incumbent, suggesting that dissatisfaction with economic management could lead to a punitive vote against the ruling party.

Overall, the data suggests that as homeownership becomes a more critical part of the ‘American dream,' its impact on electoral decisions will likely grow correspondingly.

The researchers argue that understanding the trajectory of home prices in conjunction with other economic indicators could be key to predicting the swing in voter behavior, especially in those battleground states. 

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