People Who Rent Will Decide the 2024 Presidential Election

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via Mike Shedlock

Immigration won’t decide the election. Polls have not yet captured what will. This may come as a surprise, but the top issue housing. More explicitly, it’s shelter costs.

Image courtesy of Axios + Generation Lab Youth Poll

The Economy

The economy is a very broad category that encompasses inflation, jobs, unemployment, wages, rent, and housing.

Other polls split the economy in various pieces, such as inflation and jobs. Not a single poll mentioned housing specifically.

Q: What is it that young voters really have on their minds?
A: Rent

The CPI Rose Sharply in March Led by Shelter and Gasoline

The CPI rose 0.4 percent in March. Rent was up another 0.4 percent with gasoline up 1.7 percent. Together, the pair was about half of the total rise.

Rent of primary residence, the cost that best equates to the rent people pay, jumped another 0.4 percent in March.  Rent of primary residence has gone up at least 0.4 percent for 31 consecutive months!

The “rents are falling” (or soon will) projections have been based on the price of new leases and cherry picked markets. But existing leases, much more important, keep rising.

Only 8 to 9 percent of renters move each year. It’s been a huge mistake thinking new leases and finished construction would drive rent prices.

For discussion, please see The CPI Rose Sharply in March Led by Shelter and Gasoline

Rent does not really go up every month. The BLS smooths things out over time. Instead, rent has surged once a year more than wages have kept up.

Immigration Not the Key Issue Where It Matters

I sympathize with the view that immigration is the key issue, and perhaps it is to voters nationally.

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Mayors in Chicago, Denver, and New York city are all bitterly complaining. So are governors Greg Abbot in Texas and Ron DeSantis in Florida. Add in California for good measure.

Those six states provide 188 of the 270 electoral college votes but none of them are in play.

The six swing states are Wisconsin, Michigan, Pennsylvania, Nevada, Georgia, and Arizona. Immigration is only a hot issue in Arizona where abortion is also in play.

Blacks Abandon Biden

A WSJ Swing State Poll show blacks, especially black males, are abandoning Biden in huge numbers.

In the swing states, 30 percent of black males now support Trump. That’s up from 12 percent in the 2020 election. Trump support from black females is up from 6 percent to 11 percent.

The numbers are not directly comparable because the 2020 numbers are national. However, the numbers flash a huge warning sign.

The WSJ poll confirms the NYT/ Siena poll from last October: Trump Leads in 5 Critical States as Voters Blast Biden, Times/Siena Poll Finds

Young Voters Say Their Discontent Goes Deeper Than Israel and Gaza

Israel is a big issue in Michigan, likely more so than immigration.

But across the board, Young Voters Say Their Discontent Goes Deeper Than Israel and Gaza

Generational Homeownership Rates

Home ownership rates courtesy of Apartment List

Who Are the Renters?

The answer is younger voters and blacks.

The Apartment List 2023 Millennial Homeownership Report shows Millennial homeownership seriously lags other generations.

Generation Z homeownership is dramatically lower still.

And according to the National Association of Realtors, the homeownership rate among Black Americans is 44 percent whereas for White Americans it’s 72.7 percent.

That’s the largest Black-White homeownership rate gap in a decade.

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Home Prices Hit New Record High

Case-Shiller, OER and CPI data from St. Louis Fed, chart by Mish

The latest Case-Shiller housing data shows home prices hit a new record high.

Adding insults and costs, the 30-year mortgage rate ended last week at 7.30 percent according to Mortgage News Daily.

Those looking to buy a home are very angry about being priced out while watching rent soar for nearly three years.

Explaining the Polls

The homeownership discrepancy (Black/White, and Young/Old) fully explains the polls. Yet not a single pollster or economist is in tune with relationship.

A high percentage of blacks and young voters are likely vote for Biden, but the shift vs 2020 is what will matter.

President Biden and economists in general keep singing the praises of the economy.

On average the economy is doing OK. And asset holders have generally fared well in this economy. But averages will not decide the election.

The Abortion Issue Comes Alive in Arizona

On April 17, I wrote The Abortion Issue Comes Alive in Arizona, It Could Cost Republicans Dearly

That’s still my position with an emphasis on the word “could”.

What About Trump’s Legal Issues?

Trump will lose some Republicans and undecided voters who may sit the election out on grounds that Trump was part of an insurrection or contributed to one.

However, The Need to Prevent a Biden Economic Collapse Outweighs Charges Against Trump

Republicans are willing to look the other way on the charges against Trump.

So, if current trends hold, it’s the economy that will matter.

Specifically, the election will be decided by extreme unhappiness in the block of voters who rent but want to by a home, concluding things were better under Trump.

 

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