Housing Crisis 2024: Will Harris or Trump’s Plan Lower Costs?
In the 2024 U.S. presidential race, housing affordability has become a central issue, with both candidates, Vice President Kamala Harris and former President Donald Trump, addressing the growing challenges facing renters and homebuyers alike. Amid skyrocketing rent and home prices, candidates are proposing distinct solutions, reflecting how housing affordability affects the everyday lives of Americans. Here’s a closer look at each candidate’s stance and the broader impact of housing on the economy.
The Housing Affordability Crisis
Housing costs have soared, leaving many Americans feeling financially stretched. According to a recent CNN poll, about 24% of renters stated that "the cost of housing" is their top economic concern. This isn't surprising given that, from 2020 to 2024, U.S. home prices have surged nearly 45%, and mortgage rates hover around 7%, creating a challenging environment for first-time homebuyers and renters alike.
For many, homeownership symbolizes an entryway to middle-class stability, and the lack of affordable options has intensified frustrations nationwide. “Housing affordability has grown into a major source of concern,” says Jim Parrott, a nonresident fellow at the Urban Institute.
Why Housing is Top of Mind for Voters
The U.S. is experiencing a housing shortage, impacting both rental and home prices. A report from Freddie Mac estimates the country needs an additional 1.5 million homes to balance the market pressures. Both Harris and Trump have zeroed in on these issues as they aim to attract voter support.
Beyond housing prices, nearly half of U.S. renters are spending over 30% of their income on rent, a threshold marking them as “cost-burdened,” according to U.S. Census data. In battleground states like Arizona, Michigan, Pennsylvania, and Nevada, voters are particularly attuned to housing policies as they head to the polls.
Harris’s Approach: Tax Credits and Incentives for Affordable Housing
Vice President Kamala Harris has proposed a multi-pronged plan to tackle housing costs, which includes offering up to $25,000 in down-payment assistance and a $10,000 tax credit for first-time homebuyers. Her plan also aims to partner with the private sector to build 3 million new housing units, with incentives for building starter homes. Additionally, her policy targets high rents by proposing:
Restrictions on Algorithm-Based Rent Pricing: Preventing landlords from using automated pricing tools that may drive up rental costs.
Removing Tax Benefits for Large Property Investors: Eliminating key tax benefits for corporations or investors who buy large volumes of single-family homes, which often exacerbates supply shortages.
Harris’s plan requires Congressional approval, meaning even if she wins, parts of her plan could face challenges in implementation.
Trump’s Strategy: Reducing Regulations and Repurposing Federal Land
While former President Donald Trump hasn’t laid out a detailed housing plan, he has suggested several initiatives that could impact the market. Trump’s approach focuses on reducing regulations for home builders and using federal lands for affordable housing zones. Key points of his proposed policies include:
Ultra-Low Tax Federal Land Zones: Creating low-tax and low-regulation zones on federal land to encourage affordable housing development.
Restricting Undocumented Immigrants’ Access to Mortgages: Trump has tied undocumented immigration to increased housing costs and has proposed policies to prevent undocumented immigrants from qualifying for mortgages.
Tax Incentives for Homeownership: Although details remain sparse, Trump’s campaign platform mentions promoting homeownership through tax incentives and support for first-time homebuyers.
At a speech in New York, Trump emphasized the need to bring mortgage rates down, projecting that rates could decrease under his leadership. However, mortgage rates are largely influenced by the 10-year U.S. Treasury yield, an area where presidential influence is limited.
Homeownership and Wealth Inequality
While rising home prices have been challenging for new buyers, they’ve benefited existing homeowners. In 2023, about 64% of U.S. adults owned homes, but ownership rates were notably lower among adults earning below $50,000 annually. Homeownership offers financial stability and the opportunity to build wealth, highlighting the widening gap between homeowners and renters in the current economy.
Looking Ahead
As the election approaches, voters are likely to hear more from both candidates on how they plan to make housing more accessible and affordable. From incentives for builders to rent control measures, the debate over housing affordability reflects the broader economic concerns many Americans face. Housing policies could play a decisive role in the 2024 election, as voters weigh which candidate offers the most viable path to address the ongoing housing crisis.
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