Voters Want Solutions as Housing Costs Squeeze the Middle Class

1. Big Thing: Voters are Sending a Clear Affordability Message

Forget the cost of eggs and beef. American voters are worried about the cost of entering the middle class.

What they’re saying:

“The difficulty of purchasing a ticket to the middle class has created a sense that the economy isn’t working, even when the economy isn’t so bad by usual measures like growth or unemployment … It helps explain why the young people struggling to secure a middle-class life have expressed so much more dissatisfaction with the economy than older voters.” — Nate Cohn, New York Times.

Why it matters: Affordability has risen to the top of voters’ concerns, and, according to a recent New York Times/Sienna University poll, frustration with the rising cost of living has reached an all-time high.

By the numbers:

• Two-thirds of voters think a middle-class lifestyle is out of reach for most Americans.
• 77% say it is harder to achieve that status than it was a generation ago.
• Majorities of voters said they do not feel confident in their ability to pay for housing, retirement and health care, reports the New York Times.

Our thought bubble: Nothing describes making it to the middle class like homeownership. Getting there is the challenge.

2. White House Wants Low Payments, High Home Values

Tackling housing affordability was expected to be a featured topic of President Donald Trump’s recent speech to the World Economic Forum in Davos, Switzerland.

• But Greenland was the main focus. When he turned to affordability, he emphasized the administration’s previously announced plan to prohibit institutional investors from purchasing single-family homes and promoted his proposal to cap credit card interest rates at 10% for a year.

What’s next: The president previously instructed Fannie Mae and Freddie Mac to increase by $200 billion their purchases of mortgage-backed securities to lower mortgage rates. (The spread between the 30-year fixed-rate mortgage and the 10-year Treasuries has narrowed some since the announcement.)

• Moreover, he is expecting Kevin Warsh, his nominee to chair the Federal Reserve, to persuade members of the Federal Open Market Committee to lower interest rates.

Yes, but: Trump recently told Fox News that affordability is “like an old-fashioned word” that no longer applies to this economy.

• He then went to a rally in Iowa and told attendees he wants to keep home prices high to increase people’s net worth. That could price out possible first-time buyers.
• Administration officials floated a plan to let prospective homeowners tap into their 401(k) accounts without paying a penalty to cover the cost of down payments, but Trump later said he wasn’t a fan of the idea.

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The bottom line: Should Republicans be worried by the president’s messaging? Jaret Seiberg of TD Cowen Washington Research Group (WRG) thinks so.

What they’re saying:

“TD Cowen believes the (Davos) speech signals Trump will not maintain an affordability focus heading into the midterms — increasing the probability that Democrats could retake the House and narrow the Senate margin.” — Jaret Seiberg, TD Cowen WRG

Elected officials would be wise to heed the NYT-Siena poll and make haste in solving the affordability crisis. If they fail to do so, they may be clearing out their offices after November’s general elections.

3. Tide Turning Toward Buyers?

While home prices remain elevated compared to the pre-pandemic years, the tide may be turning in favor of buyers.

• “Homebuyers are Scoring the Biggest Discounts in 13 Years,” trumpets a headline on Redfin’s website, sharing the news that the typical buyer in 2025 bought a home nearly 8% below its listing price.

By the numbers:

• The typical homebuyer who paid less than the list price in 2025 got a $31,592 discount, reported Redfin.
• The U.S. housing market had over 600,000 more sellers than buyers in December, the biggest such gap on record in seasonally adjusted data going back to 2013.

Meanwhile, large home builders, faced with the largest new-home inventory since 2009, are offering significant incentives to attract homebuyers.

• Pulte Homes is offering incentives equaling 9.9% of the purchase price, or $49,500 on a $500,000 home.
• D.R. Horton is offering to buy down interest rates to 3.99% on FHA-insured loans, through its affiliate lender DHI Mortgage.
• Numerous builders in the Highlands development outside of Houston are offering discounts as large as $55,000 and $10,000 off closing costs.