The first two months of 2018 have given both parties reasons for optimism. Republicans have cut Democrats' lead in the FiveThirtyEight average of generic congressional ballot polls in half, from roughly 12 points in December to about six points today. As debates over unpopular health care and tax bills have subsided, news of strong economic data and record-high stocks (at least until late last week) has likely aided the GOP.

However, most new district-by-district fundraising and polling numbers are downright terrible for Republicans, even in seats previously thought to be safe. In the fourth quarter of 2017, 39 Republican House incumbents were outraised by at least one Democratic challenger, and private polls and special election results suggest Democrats are highly competitive even in some districts President Trump won by wide margins.

At first glance, these two data trends might seem at odds with each other. How could Democrats' lead in national polls be shrinking while their odds in individual districts improve? The answer: the "macro" outlook for the House (national polls) and the "micro" view (district-by-district) aren't diverging; they're coming into alignment.

Democrats probably need at least a six or seven point lead on the generic ballot to win the majority, thanks to the GOP's redistricting edge and Democratic voters' tendency to cluster and waste votes in safe districts. Democrats have been above that threshold most of the past year. However, only gradually have the GOP's district-level problems come into view, as more Democrats announce candidacies and fundraising totals.

Republican leaders believe they can save their majority with a four-pronged approach: emphasize strong economic fundamentals, a muscular national security posture, opposition research against untested first-time Democratic candidates and the possible return of Nancy Pelosi as speaker. But historically, it's been difficult to frame midterms as anything other than referenda on the president and party in charge.

This week, we're shifting our ratings in 21 races towards Democrats. If anything, that still understates Democrats' potential in individual races. If Democrats win the national House vote by six points (as today's polls indicate), House control would be a coin flip. But according to our new ratings, if each party were to win an even number of Toss Up races, Democrats would only win 13 or 14 seats — ten shy of the 24 they need.

Although many Republicans are battle-tested and have been readying for a difficult cycle for months, more than a handful who have never experienced this kind of political climate (i.e., they were elected after 2008) look woefully underprepared. For example, freshman Rep. Ted Budd (NC-13) was outraised nearly three-to-one by a first-time Democratic candidate in a district that includes a lot of suburbs of Greensboro.

Budd isn't alone. As Democratic donors have engaged earlier and more heavily than in past cycles, there are 38 other Republicans who were outraised by at least one Democrat and, by our count, 23 GOP-held districts (including open seats) where Democrats held a cash-on-hand advantage heading into 2018.

If there's a silver lining for Republicans in the latest data, it's that Democrats haven't yet taken maximum advantage of the climate and there are still a few holes on their recruitment board. Of the 95 districts Trump either won by less than 15 points or lost in 2016, there were 34 where no Democrat had at least $100,000 in the bank and 48 where no Democrat had more than $250,000 at the end of 2017.

This list includes two Clinton-won districts where Democrats have struggled to recruit against popular GOP incumbents: CA-21 (Rep. David Valadao) and NY-24 (Rep. John Katko). It also includes districts Trump won only narrowly, including those held by Reps. Mario Diaz-Balart (FL-25), Randy Hultgren (IL-14), Justin Amash (MI-03) and Kenny Marchant (TX-24).

However, credible new Democrats are filling those gaps every day and several newly announced contenders didn't begin raising money until after the start of 2018. These include state Rep. Clarke Tucker (AR-02), Sen. Jeff Van Drew (NJ-02), Hamilton County Clerk of Courts Aftab Pureval (OH-01) and Navy veteran Elaine Luria (VA-02). And filing deadlines have only passed in a handful of states.

More Republican retirements in swing districts, like the six retirements so far in Clinton-won seats, could also strengthen Democrats' position. A Democratic upset in the March 13 special election in Pennsylvania's 18th CD could dampen GOP morale. And depending on how Pennsylvania's congressional map is redrawn, Democrats could find themselves with enhanced pickup opportunities in two to five districts.

The balance of evidence points towards a very wide — and mostly suburban — House battlefield with up to 75 GOP-held seats and fewer than 20 Democratic-held seats in play. At this point, we still view Democrats as ever-so-slight favorites to net at least 24 seats and win a majority, but it's a much closer fight than it was in December, when Democrats held a wider lead in national polls.

Subscribers can read the full February House Overview which includes details on each of the ratings changes.

House Ratings Changes: