McCaughey: Playing politics with housing affordability
In a recent commentary, Betsy McCaughey explores the widening political divide between homeowners and renters in the United States, particularly in the context of President Donald Trump’s proposal for a 50-year mortgage. This idea, which Trump floated on social media, aims to address the escalating affordability crisis that has made homeownership increasingly unattainable for many Americans, especially first-time buyers. The median age of first-time homebuyers has now reached 40, a stark increase from 28 in 1991, highlighting the growing challenges faced by younger generations. The implications of this trend extend beyond homeownership; they also influence voting patterns, with renters leaning heavily towards Democratic candidates while homeowners tend to identify as Republican.
McCaughey points out that the political landscape is shifting, as renters, who favor Democrats nearly two-to-one, are becoming a significant force in elections. In urban areas like New York City, even high-earning professionals are unable to transition from renting to homeownership, fueling support for progressive candidates. This demographic shift has prompted Democrats to push for policies that encourage the construction of affordable rental housing, often in traditionally red areas. For instance, Connecticut’s recent legislation mandates the development of affordable rental units in various towns, a move that some view as a “war on the suburbs.” As these policies take root, McCaughey argues that they will likely lead to increased property taxes and further complicate the dream of homeownership for first-time buyers.
While Trump’s proposed 50-year mortgage is unlikely to gain traction due to regulatory barriers, the underlying issue of housing affordability remains critical for both parties. McCaughey emphasizes the need for realistic solutions, such as lowering mortgage rates and increasing housing supply, to address the root causes of this crisis. With upcoming elections on the horizon, both Republicans and Democrats must navigate the complex realities of homeownership and rental markets, as the future of their political fortunes may hinge on their ability to respond effectively to the housing needs of Americans. As the divide between homeowners and renters continues to shape the political landscape, it is clear that addressing housing affordability is not just a policy issue but a pivotal factor in electoral success.
Homeowners vote red. Renters vote blue.
Will President Donald Trump’s 50-year mortgage make a red voter out of you?
That is what the president hoped on Saturday, when he posted the idea of stretching out the customary 30-year repayment terms for home mortgages to 50 years.
Turns out, that idea is smoke and mirrors. But at least Trump is recognizing that home affordability is a real crisis, not fake news.
“Affordability” is the campaign pledge that produced big wins on election day, and most of the winners were Democrats.
Affording a home is increasingly out of reach. The median age of the first-time homebuyer just hit 40 years old, according to the National Association of Realtors. Many women are worried about hitting the brick wall of no longer being able to bear children, and they still can’t afford a starter home.
In 1991, the median age of someone buying their first home was 28, but in the last few years it’s become the impossible dream for people even in their 30s. The implications are huge, not only for starting a family but also for voting.
Renters favor Democrats by almost two to one, according to data from the American National Election Studies. Homeowners are twice as likely as renters to identify as “strongly Republican,” reports Aziz Sunderji, an economist who analyzed several decades of this data.
Starting in the 1970s, renters were slightly more inclined to vote Democratic than Republican, but in the last 20 years, they have swung sharply leftward.
Making homeownership possible is not only good policy. For Republicans, it’s smart politics.
In New York City, people in their 30s who are earning good money — as much as $120,00 or more, according to economics reporter John Carney — cannot make the leap to homeownership. In the mayoral election, strong support for democratic socialist mayor-elect Zohran Mamdani came from Brooklyn neighborhoods inhabited by “downwardly mobile professionals” who are settling for cramped rental apartments and roommates. They have “no hope of buying a home,” Carney reports.
Scalded by the election results across the nation last week, Trump floated the idea of a 50-year mortgage on Truth Social, with side-by-side pictures of himself and Franklin Delano Roosevelt, who devised the 30-year mortgage after the Depression to relieve homeowners.
The 50-year mortgage is a nonstarter because it’s prohibited by Dodd-Frank, among other reasons. But there are realistic steps to help first-time buyers get into the market.
Lowering mortgage rates will help. Many current homeowners, especially the elderly, who would like to downsize are locked into their current homes because they’re financed at low rates. If they sell and buy a new property, they’ll be stuck with higher interest rates. So they’re waiting, keeping urgently needed inventory off the market.
Trump has been all over Federal Reserve Chairman Jerome Powell to lower interest rates. He’s already done so twice, in September and October.
But long term, this is a problem of supply and demand. To increase the supply of new homes for sale, builders need to feel confident buyers will be able to pay the price. At the end of October, builder confidence was 37 out of 100, according to the National Association of Home Builders. What will boost their confidence? Job growth and consumer confidence.
With the government shutdown ending, job market data will soon be available again. Builders will be watching.
Meanwhile, politicians will have their eyes on the polls. Behind the poll numbers is widespread discontent that the American dream of homeownership is far out of reach. Republicans hoping to make gains in next year’s midterm elections better pay attention.
Meanwhile, Democrats know where their votes are: renters. In many states Democrats are pushing towns with mostly single-family housing to build apartment buildings, including units to be rented to low-income families. Trump identifies this as the Democrats’ “war on the suburbs.”
In Connecticut, leftists aligned with Democratic Gov. Ned Lamont are ramming through a bill this week that mandates how much affordable rental housing every region of the state will build. Forcing small Connecticut towns like Easton or Wilton to build apartment buildings and accommodate a large influx of renters will push up property taxes, as the towns have to build sewer lines, bus lines and more schools. The higher property taxes go, the further out of reach buying a single-family home is, especially to first-time homebuyers.
But Democrats are turning a deaf ear to these objections. They know the fundamental truth. The more renters move into a red town, the more likely that town is to flip blue.
Betsy McCaughey is a former Lt. Governor of New York State and Chairman & Founder of the Committee to Reduce Infection Deaths at www.hospitalinfection.org. Follow her on Twitter @Betsy_McCaughey.
