Understanding the Economy’s Impact on Midterm Elections

As the midterm elections draw near, many Americans are reflecting on their economic wellbeing since the last election cycle. The lingering question remains: are voters better off today than they were two years ago?

Economic Sentiment

Recent surveys indicate that economic issues are top of mind for the electorate. A poll conducted by NBC News shows that a significant number of voters are frustrated with the economic situation, particularly in relation to President Donald Trump’s administration. As they head to the polls, these feelings are likely to shape their choices.

Soaring Living Costs

One of the major factors weighing on voters is the cost of living. Inflation has surged in the past couple of years, outpacing wage growth. Specifically, inflation reached 3.7% in September, while wages grew only by 3%, as reported by the Bureau of Labor Statistics. This disparity means that many families are feeling the pinch of higher prices.

Rising Gas Prices

Gas prices have seen a dramatic increase, significantly contributing to overall consumer costs. When Trump's second term began, the average price of regular gas was $3.12 per gallon and dipped to $2.98 just before the onset of escalating tensions in Iran. However, prices have since skyrocketed beyond $4 per gallon, marking the highest levels typically recorded ahead of an election.

Diesel prices have followed suit, hitting record highs recently. Starting at $3.63 and slightly rising to $3.75 at the initial stages of the Iran conflict, diesel fuel is now above $6. Such increases in transportation costs typically have a cascading effect, raising prices across various sectors.

Housing Market Challenges

The housing market presents another hurdle for potential buyers. While mortgage rates once climbed above 7% in early 2025, they experienced a brief decrease but have soared past 7% again following the onset of conflict in Iran. Average home prices have also seen a staggering increase of 57% since January 2020, now reported at $422,700 according to the National Association of Realtors. These factors are pricing many eager homebuyers out of the market.

Meanwhile, homeowners have benefited from a surge in property values, with total real estate equity exceeding $35 trillion as of Q2 2026. This figure has more than doubled over the last ten years. However, for prospective buyers, this equity remains largely inaccessible for day-to-day expenses.

Stock Market and Wealth Disparities

Interestingly, while many struggle with everyday expenses, the stock market has enjoyed considerable gains. The S&P 500 index has surged over 26% during Trump's second term, despite fluctuations tied to tariff announcements and global tensions. The current boom has largely been supported by robust corporate earnings and increased investments in artificial intelligence.

However, these stock market successes often highlight a greater divide within the American economy. For the wealthy—particularly Wall Street investors—gains have been substantial, while the everyday American continues to face challenges in making ends meet.

Looking Ahead

As voters prepare to cast their ballots, the economic landscape is likely to influence decision-making significantly. Many will reflect on their personal economic situations as they navigate issues like inflation, housing accessibility, and rising costs. With the elections on the horizon, it remains to be seen how these economic factors will ultimately shape the political landscape.