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Since the 2020 election, mortgage rates and selling prices have skyrocketed, reaching new highs in swing states, Redfin announced on Tuesday.

The issue of housing affordability is at the forefront of the upcoming presidential election, where swing states will determine the next president and the future of housing costs. Redfin’s 2024 swing states are Arizona, Nevada, Wisconsin, Michigan, Pennsylvania, Georgia and North Carolina.

“Voters in swing states care about housing affordability because soaring home prices and mortgage rates, along with a shortage of homes for sale, have made homeownership feel impossible for some Americans,” Redfin Senior Economist Elijah de la Campa said. “While swing states have historically had lower housing costs than blue states — and most still do — markets in swing states have not been immune to the affordability crunch the country has been facing for the last several years. The inability to afford a home is making a lot of voters feel bad about the economy and their financial prospects.”

According to a Redfin report, swing-state monthly housing payments have nearly doubled, rising by 92 percent to $2,161. Since 2020, median home sale prices have increased by approximately 40 percent, hitting an all-time high of $316,063 in 2024. The mortgage rate is currently around 7 percent, more than double the record low of 2.65 percent in 2021.

Redfin’s analysis of housing-market data and incomes for blue, red and swing states was gathered from 2016-2024. The data is annual for 2016-2023, while 2024 data includes January through May.

Housing prices have also risen for red (Republican-leaning) and blue (Democrat-leaning) states. In red states, median house payments have increased by 95 percent to a record high $2,066. In blue states, payments have risen by 83 percent to $3,311.

Homeowners face a major dilemma since incomes have not increased at the same rate as home prices, due in part to aftereffects of escalated homebuying during the COVID-19 pandemic.

While the demand rose for remote work and low mortgage rates in 2020 and 2021, so did home prices, especially in Sun Belt swing states such as Georgia and Nevada. Major metropolitan centers in these states, Atlanta and Las Vegas, were among those that saw the highest increase in residents during that period.

As a rule, to be considered affordable, homeowners should spend no more than 30 percent of their income on monthly house payments.

By this measure, just 35.1 percent of swing-state homes on sale this year were affordable to a household earning the U.S. median income of $79,155, down from 65.5 percent in 2020. In red states, 36.6 percent of listings are affordable on a median income, down from 69 percent in 2020. In blue states, 25.2 percent of homes are affordable on a median income, down from half in 2020.

According to Redfin, swing-state homeowners looking to buy bigger are stuck due to housing costs outpacing the increase in their equity. Black and Hispanic families are another group who have difficulty snagging swing-state homes.

Families earning median swing-state income for Black families would spend nearly half (48.2 percent) of their earnings on a home. In 2020, that household would have spent 32.7 percent of their income on a home. A Hispanic household would spend 38.3 percent of their income on the median priced home, an increase from 26.8 percent in 2020.

It is worth noting that housing prices also saw a jump between the 2016 and 2020 elections. From 2016 to 2020, swing states saw a 40 percent average home price increase; blue states saw a 27 percent increase, and red states jumped by 28 percent.

Ahead of the upcoming 2024 election, President Biden released a plan for lowering housing costs while Donald Trump mentioned a strategy for tackling the market.

Email Richelle Hammiel

At Inman Connect Las Vegas, July 30-Aug. 1, 2024, the noise and misinformation will be banished, all your big questions will be answered, and new business opportunities will be revealed. Join us.

In today’s fast-paced real estate industry, change is not just inevitable — it’s constant. I’ve witnessed first-hand the seismic shifts that can occur almost overnight, from market fluctuations and regulatory changes to technological advancements and shifting consumer preferences. All great businesses and industries undergo change frequently.

Leading during such times requires not only adaptability but also a proactive and people-centered approach. We are going to be inundated with new information over the next few months, and I truly believe we will all look back at this moment in our industry’s history as an opportunity for learning and growth. 

Embrace the change

Change is a good thing, but it all starts with mindset. If you are an agent who is looking at our current season of change with optimism and positivity, I believe you will make it out of this as a better Realtor and leader. In a landscape where changes are occurring almost daily, agility and attitude become a leader’s best asset. This means fostering a culture that is open to innovation and quick to pivot when necessary. 

I have found that attitude, like many other things in real estate, can have a domino effect. As a leader, it is your job to not only have a positive attitude toward change but also to influence others to carry that same attitude. This doesn’t mean falsifying the truth; there are many things coming our way that may be daunting or concerning to people.

Influencing others with a positive attitude simply means to focus on the positive aspects to come, not just the negative. We all know many “talking heads” who thrive on sharing only the negative side of things; in my opinion, that isn’t helping anyone in our industry. 

Prioritize communication 

Clear and frequent communication is paramount during times of change. Whether it is email communications, social media posts or other internal methods, agents want to feel included and in the know. I believe that the best agents in each market are those who are informed, ethical and educated. As leaders, it is our responsibility to ensure we trickle down any information we know to our audiences. 

Uncertainty can breed anxiety, and the best way to combat this is through transparency. I make it a point to keep our brokerage informed about industry developments, company strategies and any potential impacts on their roles. This not only builds trust but also ensures everyone is aligned and moving in the same direction.

Change can be made harder when there are two waves of people moving in opposite directions, and efficient communication helps to drive everyone in one direction with the facts.

Leading with empathy

A leader’s vision provides a sense of direction and purpose. It is almost like a sixth sense that others can feel from a leader. Whether you are a broker, office manager, or in any other leadership role at your firm, people are most likely looking to you for hope in this season.

Many things are uncertain and potentially concerning to many agents. It’s our job as leaders to meet them where they are, acknowledge that and find ways to counterbalance the anxiety. 

Understanding and addressing the concerns of your agents helps in building a resilient and cohesive organization. It is important to articulate a clear vision of where the company or industry is headed and a plan to navigate the changes ahead. Sometimes, even admitting “I don’t know what is going to happen, but I will be here for you,” speaks volumes. 

Building a culture of resilience

Fostering a culture of resilience is essential for navigating change. This means many things, but for one, it means encouraging a mindset that views challenges as opportunities for growth and learning. By celebrating successes, learning from failures, and maintaining a positive outlook, you can build a resilient organization that thrives amid change. 

Leading during times of change is undoubtedly challenging, but it also presents an opportunity to propel education, build stronger teams and enhance relationships. Don’t miss this key time in our industry to double down on caring for your people.

Justin Bailey is the CEO of Realty Executives Associates, the largest real estate brokerage in East Tennessee. Connect with Justin on Instagram and Linkedin.

At Inman Connect Las Vegas, July 30-Aug. 1, 2024, the noise and misinformation will be banished, all your big questions will be answered, and new business opportunities will be revealed. Join us.

Despite month-over-month gains, homebuilding activity is still lagging behind 2023, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development’s latest New Residential Construction report.

Building permits increased 3.4 percent month over month to a seasonally adjusted annual rate of 1,446,000; however, permit activity was down 3.1 percent from June 2023’s seasonally adjusted annual rate of 1,493,000. Building permits for single-family homes fell from May to June, sliding 2.3 percent to 934,000.

Housing starts followed a similar trend in May, with monthly gains and annual declines. The seasonally adjusted annual rate for privately owned housing starts reached 1,353,000 in June—3.0 percent above May and 4.4 percent below June 2023. Like single-family building permits, single-family housing starts were stifled in June, declining 2.2 percent to a seasonally adjusted annual rate of 1,002,000.

Although permitting and starts were down annually, housing completions in June were well above 2023 levels.

Privately-owned housing completions increased 10.1 percent month over month and 15.5 percent year-over-year to a seasonally adjusted annual rate of 1,710,000. Single-family completions got a small boost, rising 1.8 percent month-over-month to a seasonally adjusted annual rate of 1,019,000.

Bright MLS Chief Economist Dr. Lisa Sturtevant said the decline in apartment construction “was not surprising,” given the breakneck speed builders maintained in 2023 to meet heightened renter demand.

“In 2023, there were record numbers of apartments delivered in some markets across the U.S., leading developers to pull back on bringing new units to the market,” she said in a statement. “Last year, rents in some markets fell and property managers were offering rent and other concessions to attract renters.”

“In June 2024, the number of new starts of units in buildings with five or more units (360,000) was down 23.4 percent compared to a year ago,” she added.

As far as single-family housing starts, Sturtevant and Realtor.com Senior Economist Joel Berner said the slowdown in permits and starts reflects slowing homebuyer activity and weakening homebuilder sentiments amid several market headwinds.

“Demand for single-family housing is still strong; however, higher mortgage rates and record high home prices have caused some prospective buyers to pause their home search,” Sturtevant said. “… Builders continue to offer rate buy downs and upgrades to buyers, but traffic has dropped as affordability has become a growing concern and the inventory of existing homes has expanded.”

Berner said the latest inflation report offers hope of an impending rate cut, which may motivate homebuyers to snap up lingering new-home inventory.

“Homebuilder sentiment has slid for a third consecutive month as construction firms fear being left with unsold new inventory on their hands, and homebuyers are putting off their purchases until their financing options improve,” he said. “However, the latest inflation reports may precipitate rate cuts that spur on new home buyer activity to match this month’s positive construction news.”

Although June’s report revealed lackluster annual trends, Berner and First America Deputy Chief Economist Odeta Kushi said monthly gains in permitting, starts and completions are a silver lining the industry shouldn’t ignore.

“Home prices remain near an all-time high, but strong year-over-year inventory growth of for-sale listings and a slow pace of new home sales pose a threat to homebuilders looking to cash in on their new building projects,” Berner said in a statement. “In spite of these headwinds, residential construction in June is showing signs of improvement.”

Kushi added, “Despite the challenging environment, the housing market remains structurally underbuilt. For more than a decade, homebuilding has not kept up with the demand for shelter, creating a housing supply deficit that has proven difficult to reduce significantly. As builders break ground on additional housing, we will inch closer to balancing our housing deficit.”

Email Marian McPherson

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A fintech company that promises to make it easier for foreign investors to claim a piece of American real estate has formally launched with $100 million in pre-selected investor applications already submitted, a July 23 press release said.

Waltz promises to use its software-enabled workflow to reduce the time and number of administrative hurdles non-citizens face when looking to invest in the U.S., stating it can be done less than 30 days. The company is starting operations in nine states: Alabama, Florida, Georgia, Maryland, Mississippi, North Carolina, Ohio, South Carolina and Texas.

Yuval Golan, founder and CEO of Waltz, said in a statement that buying real estate should be as easy as buying anything else on the internet.

“Investing in anything nowadays takes just a few clicks, unless you’re a foreign citizen investing in U.S. property,” Golan said. “Based on my own experiences attempting to invest around the world and in the U.S., I wanted to make the process for non-citizens as straightforward and simple as possible to access this blue-chip housing investment market.”

The process starts with finding a suitable investment opportunity and working alongside their assigned real estate agent and a mortgage broker. In some cases, parties will work with an organization that provides both.

The remote, consumer-facing mobile and web experience involves LLC creation, the establishment of an EIN (employer identification number), legal identity verification, and even a selected real estate representative and mortgage pre-approval letter.

“Investors are then set up with a U.S. digital bank account to receive rental income, pay property taxes and to reduce withholding,” the release stated. “Expensive currency conversion fees and unpredictable exchange rate fluctuations are also eliminated.”

Waltz will promote mortgages for foreigners, which can be for as much as 70 percent loan-to-value because it’s based on use as an investment property. All other necessary steps — inspection, appraisal, title search and other escrow services — are built into Waltz’s remote purchasing model. Many of these processes were pushed to automate during the COVID era, when so few steps of the traditional home transaction were handled in person.

The company also makes connections to domestic property managers, tax professionals and other necessary service providers.

Waltz conducted two funding rounds to date totaling $24 million. A seed round closed in early 2022 and a Series A in March of 2024, according to the release.

“Now, investors can just Waltz in, Waltz out, and they immediately start their journey of turning the wealth they built into the future they dream of, while we manage the compliance, legal, banking and regulatory side of the process,” Golan said.

Email Craig Rowe