Arizona's Housing Market 'Crisis' Gives Kari Lake 2024 Confidence

As Arizona grapples with a multi-year housing market downturn, Kari Lake, a Republican Senate hopeful, sees an opening, banking on public discontent to bolster her 2024 campaign.

On Tuesday, Lake argued to Newsweek's congressional correspondent Alex Rouhandeh that her robust policy solutions will resonate with Arizonans who are "fed up" with the state's economic challenges, particularly, Arizona's broader housing affordability crisis and soaring mortgage rates that the country as a whole is dealing with.

With Independent Senator Kyrsten Sinema stepping away from the race, Lake's bid for the Senate could potentially flip the seat from Democratic to Republican control.

Leveraging economic discontent as an issue, Lake aims to capitalize on Arizonans' sentiment regarding the housing market woes, as well as campaigning on the border crisis, to gain an edge in what could be a battle for Arizona's potentially game-changing Senate spot.

"Everyone's fed up with where the economy is going," Lake said to Newsweek. "They're fed up with mortgage rates, inflation, they can't afford anything."

Arizona's real estate sector, once booming during the pandemic, is now signaling a distressing downturn. John Wake, an independent real-estate analyst, characterized the sharp decrease in home sales as a "real-estate sales recession," with Phoenix seeing a 40 percent drop from 2021, Newsweek reported last month.

Despite a potential soft landing for the economy, homeowners are apprehensive as they face both high interest rates and steadfastly high property prices, with little relief on the horizon. And, according to Arizona State University real estate professor Mark Strapp, "the problem is getting worse."

"We haven't seen home prices fall," Strapp said to Phoenix local TV station KPNX reporter Gabriella Bachara. "They remain rather stubborn and I think that has much to do with the available inventory."

The issue in affordability that Bachara deemed a "crisis" is further compounded by an acute shortage of available homes in the state, resulting in a market where homeowners are hesitant to relinquish low mortgage rates for new purchases.

With an average home value in Phoenix slightly declining over the past year, and the median household income lagging behind the required $75,000 to maintain a middle-class status, the financial pressure on Arizonans intensifies.

While some economists predict a drop in interest rates come summer, a normalization of home prices seems a distant goal, likely taking years to achieve.

Amidst the challenging economic conditions, Lake is framing her Senate campaign, targeting the "fed up" sentiments of Arizona residents over housing market issues and broader economic concerns.

With recent polling showing a divided field, such as the Rasmussen poll conducted in late February showing Lake with a 4-point lead over Democrat Ruben Gallego, the Senate race might be a closely contested battle. Conversely, an Emerson College poll conducted around the same period positions Gallego with a 7-point advantage, underscoring the unpredictive conclusion for the race.

Lake's preliminary focus is to overcome Republican challenger, Pinal County Sheriff Mark Lamb, positioning herself as the primary contender against Gallego in a race that could pivot the Senate seat from Democratic to Republican control.

Amidst the electoral dynamics, Arizona's economic outlook remains a pivotal issue. A New York Times/Siena survey run in December of last year indicates a majority of Arizona voters perceive the country's economy negatively, with inflation and housing costs being significant concerns.

Despite varying perspectives on the state's economic health—from optimistic forecasts by ASU's Seidman Institute to cautionary notes on inflation by Eller College of Management—Lake aims to leverage economic dissatisfaction to her advantage, arguing for policy changes to address the housing market crisis and broader economic challenges facing Arizonans.