What Trump Could Mean for Real Estate
Political pundits around the country were stunned Tuesday night when Donald Trump secured enough to votes to beat Hillary Clinton to become the next President of the United States. While supporters from both sides are still reeling from emotions, we woke up wondering what Trump could mean for real estate.
According to INMAN and Thomas Mitchell an impending Trump presidency will change the real estate market. Here are eight possible outcomes.
Will he use real estate to kickstart the economy? He has said indicates that he’s interested in boosting homeownership. Much of Trump’s platform has centered around deregulating the financial market in order to more fully revive it. That alone could also give a boost to real estate.
What will happen to mortgage rates? “Mortgage rates are falling because investors are seeing safe yields in U.S. mortgage backed securities, reflecting their confidence in the relative safety of the U.S. housing market,” wrote Trulia chief economist Ralph McLaughlin this morning in a statement. “Furthermore, the Fed is likely to delay a December rate hike because of global economic turmoil. Both effects mean short term win for borrowers, and we’ll likely see an increase in mortgage refinancing if rates continue to plummet.”
Could it become easier to borrow money? A Trump presidency could make it easier for consumers to own homes would be to lower premiums for FHA loans or cutting guarantee fees for Fannie Mae or Freddie Mac.
Will there be cutbacks in federal programs? Trump has not indicated which programs he would be most likely to target for cutbacks.
What about regulations? This is something that Trump — and the Republican Party as a whole — has been vocal about.
- Banking regulations – Loosening regulation on lending could potentially boost homeownership by making it easier for consumers to obtain loans.
- Building regulations – “There’s no industry, other than probably the energy industry, that is more overregulated than the housing industry … Twenty-five percent of costs to build a house are regulations. I think we should get that down to 2 percent.”
- Employer/independent contractor regulations – if Republicans are successful in getting rid of some or all of PPACA or OSHA, then that could mean lower operating costs for small business, including real estate brokerages. It could also mean that agents are no longer required to purchase their own health insurance as independent contractors if PPACA is repealed or amended.
Will the mortgage interest deduction go away? Last year, a tax plan that Trump shared specifically and explicitly mentioned that he would preserve the mortgage interest deduction.
Will there be reforms at Fannie Mae or Freddie Mac? The GSEs are projected to run out of funds in 2018, so if we don’t have a plan by the time that happens, we’ll need one.
What about immigration? Trump’s immigration policy has undergone many changes since he first announced his candidacy, and immigration reform won’t be an easy bill to push through, so it’s difficult to determine whether this will influence the real estate market to any large degree.
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