Biden Pushes to Lower Housing Costs, Presidential Election Also Depends on Real Estate

President Joe Biden is taking significant steps to address housing affordability before this year’s election. His principal plan is to increase the supply of homes to ensure more people have access to affordable housing. Despite improvements in the U.S. inflation rate, high housing costs have contributed to voters’ perception of a higher cost of living. This issue could potentially hamper Biden’s campaign in the upcoming election.

According to Politico, a U.S. political media outlet, on the 19th (local time), President Biden will announce a new policy proposal to reduce Americans’ housing costs during his visit to Nevada, a key battleground state. A White House official stated, “We recognize the need to increase the supply of homes to reduce rental and homeownership costs, which is a top priority for the Biden Administration.”

President Biden emphasizes improving inflation without plunging the economy into recession, making reducing Americans’ living costs a core component of his re-election campaign. However, despite overall inflation indicators improving, housing costs continue to rise. This ongoing increase is seen as a dominant factor in the stagnation of President Biden’s approval ratings due to worsening consumer sentiment.

According to the U.S. Bureau of Labor Statistics, the Consumer Price Index (CPI) rose 3.2% last month compared to the same month of the previous year, surpassing expert predictions. The main driver of this increase was the cost of housing, which rose by 5.7% annually and contributed to two-thirds of the total inflation rate. Housing costs account for 35% of the CPI weight.

The continuous rise in housing costs is due to high interest rates and a lack of housing supply in the U.S. Politico reports that Nevada, which President Biden visited today, has seen an acute increase in housing prices due to delays in housing supply following the pandemic.

Earlier this month, the White House included incentives to promote housing construction and tax deductions for low-income renters and first-time homebuyers in its federal budget scheme for the fiscal year 2025 submitted to Congress. While it’s unlikely that this budget will pass as is due to Republican opposition, White House officials have stated that President Biden will urge Congress to approve the budget.