‘Hibernating’ Housing Market Could Stoke Voter Anger in Midterms

As the U.S. approaches the midterms, housing has emerged as a key concern for voters, leading experts to label the market as "hibernating." Joel Berner, a senior economist at Realtor.com, stated that the market has seen very low sales figures over the past few years, leading to a buildup of pent-up demand from potential buyers. Pete Carroll, executive vice president at Cotality, explained that while housing affordability is not a dividing issue, it is a significant part of broader voter frustration over the cost of living.

According to a Pew Research Center survey, 66% of U.S. adults are very concerned about housing costs, with 76% of Democrats and Democratic-leaning independents feeling this way, compared to 53% of Republicans and Republican-leaning independents. Additionally, a Hometap survey of homeowners found that 77% would be influenced by a candidate's platform on lowering homeownership costs.

Despite predictions that 2026 might bring some improvement in housing affordability, Berner noted that mortgage rates remain the main reason for the current underperformance of the market. Mortgage rates have risen from 6.19% a year ago to 7.32% as of October 22, 2025, hindering the housing market's growth. As of September, the median price for existing homes was $417,500, up 1.3% from the previous year, but home sales had dropped by 2.2% year-over-year.

The inventory of existing homes reached 1.60 million units, up 1.9% from August and 4.6% from September 2025. However, affordability has declined in three of the four regions, with the Northeast experiencing the most significant decline of 4.5%. New home prices have fallen to the point where they are often cheaper than older homes, leading to discounts and incentives offered by developers.

Despite this, new home sales were down 5.3% year-over-year. Lawrence Yun, NAR chief economist, attributed the decline in new home sales to higher mortgage rates, suggesting that they may have peaked.