How Surging Home Prices Could Benefit One Presidential Candidate on Election Day

Rising home prices have emerged as a top issue for voters in the upcoming presidential election, with both Donald Trump and Vice President Kamala Harris vowing to make housing more affordable and accessible.

For renters priced out of the market to buy their first home, soaring home prices are a major pain point. In the four years through July 2024, national home prices have risen 47%, according to the S&P CoreLogic Case-Shiller Home Price Index.

A housing shortage is partly to blame, with Freddie Mac estimating the country needs at least 1.5 million additional units to address a chronic undersupply.

In the 2024 election, both candidates have emphasized their plans for making starter homes more abundant and affordable, and the Trump campaign has sought to capitalize on voter dissatisfaction with the housing market by blaming Democratic policies.

However, most voters already own a home, and their rising equity value is a factor that often goes overlooked in discussions about housing costs and the election. In May, Realtor.com® first reported on an academic study that found rising home prices were linked to greater support for the incumbent in a presidential election, in the same way that a rising stock market typically benefits the incumbent.

Since that report, President Joe Biden has withdrawn from the race and Harris secured the Democratic nomination. So will Harris benefit from rising home prices to the extent that Biden might have?

To find out, we spoke with Eren Cifci, an assistant professor of finance at Austin Peay State University in Tennessee and lead author of the recent study on home prices and the electorate.

“In our study, we found that when an incumbent party candidate runs for reelection, voters respond more strongly to increases in their home values and tend to favor the incumbent party. We also found evidence that voters tend to favor the incumbent party even if a different candidate from the incumbent party candidate runs for the election,” says Cifci.

In other words, the study found that rising home prices are more strongly correlated with support for an incumbent party’s candidate who is running for reelection. The correlation grew weaker when the party holding the White House put forward a nonincumbent candidate, but remained statistically significant.

That suggests that Harris might expect to see some electoral benefit, though not as much as Biden, in the closely contested “swing counties” that have seen the biggest home price increases over the past four years.

“Our findings have important implications for the incumbent [party’s] candidate in the upcoming election,” says Cifci. “Particularly in such a close race, even small factors can have a significant impact on the outcome.”

Cifci’s study, “Housing Performance and the Electorate,” analyzed home prices and election results at the county level for each of the six presidential elections from 2000 to 2020. The study examined an effect known as the “homevoter” hypothesis, which holds that homeowners tend to vote in ways they believe will maximize their own property values.

The authors found that local home price performance is significantly linked to voting in presidential elections at the county level. Counties with superior gains in home prices in the four years preceding an election were more likely to “vote-switch” to the incumbent party’s presidential candidate.

Conversely, counties with relatively inferior home price performance leading up to an election were more likely to flip their vote to support the candidate challenging the incumbent party.

Nationally, nearly 66% of housing units are owner-occupied. Homeowners are also more likely to be registered to vote, and cast a ballot, than renters, making them a powerful demographic on Election Day.

Most polls continue to show an incredibly tight race between Harris and Trump, and the election will likely come down to a small handful of hotly contested swing states, where a few thousand votes could make the difference. In those states, local home prices could play a role in deciding the outcome, according to the study.

“Since our study also focused on swing counties, and it seems that the swing counties/states are likely to determine the election’s result, the relevance of our work becomes even more pronounced,” says Cifci.

“Now, that being said, I want to avoid speculating beyond the study’s scope for the sake of attention,” he adds. “There are multiple dynamics at play and several unique aspects of this election. I think it is hard to say with certainty how each factor will influence voter behavior.”