Do Elections Depend Upon Home Mortgage Rates?

Changes in the availability of mortgage credit can impact voting patterns in presidential elections, according to a new paper by scientists Alexis Antoniades of Georgetown University and Charles W. Calomiris of Columbia University. They evaluated swings in mortgage credit to study the effect they might have had on political choices. When credit is readily available, consumers do not seem to be at all politically influenced by mortgage credit. However when loans are challenging to come by, they take their anger out on incumbent politicians and parties, the report suggests.

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“If the supply of home mortgage credit had actually not contracted from 2004 to 2008, [Republican presidential candidate John] McCain would have gotten half the votes needed in nine vital swing states to reverse the result of the election,” which went to Barack Obama, the scientists compose. “The effect on ballot in these swing states from local contractions in mortgage credit supply was five times as essential as the increase in the unemployment rate.”

Researchers also keep in mind that the limits on mortgage credit throughout Obama’s very first term also had repercussions for the Democratic Party, which lost congressional seats. On the other hand, when credit was commonly offered, it did not seem to help the incumbent Democratic Celebration in 2000 or the Republican Party in 2004, researchers keep in mind. Consumers don’t seem to reward politicians for actions to expand credit, but they do appear to take notice and action when it isn’t commonly available, the researchers keep in mind.

“Asymmetries in voting response might reflect attribution predisposition,” the scientists write. “When a voter gets a job or protects a home loan, he or she may conclude that this is an effect of his or her achievements; when a voter loses a task or is declined for a mortgage, she or he might find it much easier (in the sense of avoiding cognitive dissonance) to blame others.”


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