Midterm voters face affordability squeeze

Household finances are weighing heavily on the upcoming midterm elections as costs for basic necessities rise. A survey of 1,000 registered voters conducted in mid-October found that most Americans hold a pessimistic view of the economic outlook. William Galston, a senior fellow at the Brookings Institution, stated that affordability is the central issue in the forthcoming elections and that nothing else is close.

Housing costs are a primary concern for voters across the political spectrum. A Pew Research Center survey indicated that 66% of U.S. adults are very concerned about housing expenses, a figure that includes 76% of Democrats and Democrat-leaning independents and 53% of Republicans and Republican-leaning independents. The median price of an existing home reached $417,500 in September, according to the National Association of Realtors. This price is nearly 54% higher than the level recorded in September 2019.

Renter households face substantial financial pressure as well. Data from the Harvard Joint Center for Housing Studies showed that 22.7 million renter households spent more than 30% of their income on rent and utilities in 2024. Of those, 12.1 million households dedicated more than half of their income to housing. Congress passed the 21st Century ROAD to Housing Act earlier this year, which aims to encourage construction and limit institutional purchasing of single-family homes.

Tax policy and health insurance costs are also influencing voter decisions. The One Big Beautiful Bill Act, signed into law in 2025, made permanent tax changes and added deductions for specific income types. The Internal Revenue Service reported that the average tax refund for individual returns was $3,276 as of May 8, up from $2,939 in 2025. However, fewer than 10% of U.S. adults surveyed by Politico in mid-October identified taxes as the single most important election issue.

Healthcare affordability remains a point of contention for many families. More than 60 million people are enrolled in Medicaid, while approximately 19.2 million Americans are enrolled in Affordable Care Act marketplace plans. The expiration of enhanced premium tax credits at the end of 2025 has led to sharp increases in monthly premiums. Meredith Rosenthal, a professor at the Harvard T.H. Chan School of Public Health, noted that these policy changes have created conditions where voters may seek a change in Congress.

The Federal Reserve recently raised interest rates to a range of 3.75% to 4%, marking its first hike since 2023. Fed funds futures currently price in a roughly 10% chance of another rate increase when the central bank meets this week. Eugenio Aleman, chief economist at Raymond James, said that broadening inflation driven by energy costs could force the Fed to act. The next Congress will also face decisions regarding Social Security, whose retirement trust fund may be depleted in 2032.

Student loan borrowers are also affected by recent policy shifts. Approximately 9.3 million federal student loan borrowers were in default as of late June. The Department of Education has given borrowers a limited window to exit the Saving on a Valuable Education repayment plan. New federal borrowing caps took effect in July, limiting graduate students to $20,500 per year and professional students to $50,000 per year. These restrictions are expected to impact access to higher education for low- and middle-income students.