Will The Presidential Election Impact the Home Buying Market?

It’s no surprise that people within the real estate industry are wondering what could potentially happen in regards to home prices now that Donald Trump is the President elect. After all, there are a lot of unknowns surrounding his presidency. As both a real estate investor and a President, Trump could have a very big impact on the real estate market.

Large Pent Up Demand For Homes

Not long ago, Trump provided an example for the poor economy by bringing up the fact that American home ownership was at 62.9 percent in the second quarter of 2016 – the lowest rate in 51 years. However, this stat may not actually be a bad thing, as a number of experts have pointed out. Millennials make up the largest demographic in the United States–and many of them have either not yet reached the age for home ownership, or they currently reside in multi-family housing as they settle into careers and families.

In the future, as millennials grow their savings and have families, these households are more likely to move from rental properties to homes. Assuming no major economic woes occur in the next four years, there are millions of millennials that will be looking to purchase homes.

How Trump Could Affect The Housing Market

One of Trump’s priorities as President is to cut taxes and spend on infrastructure. If this is something that he ends up doing, then the short-term prospects of the housing market should be good. If his transportation and infrastructure plan come to fruition and work out as planned, it should create jobs as well as increase wages for workers across America. This should, in turn, lead to greater demand in the housing market.

However, the demand for housing is ultimately reliant on consumer confidence. ┬áThose who do not have confidence in Trump’s ability to help the economy may not want to risk an investment in a new home, where as those that do will believe that investing in property now could lead to a profit later.

Rising Interest Rates

Mortgage rates could have a big impact as well. Rates have been rising since the election and many investors have begun pulling money out of U.S. Treasury Bonds and investing them into Japanese and European bonds as a reaction to the uncertainty of a Trump presidency. The long-term state of mortgage rates will depend heavily on the pressure that Trump puts on the Federal Reserve.

Impact Can be Difficult to Determine This Early

It’s difficult to pinpoint how Trump’s presidency will affect home prices–it’s simply too early to determine whether his policies will be a boon or a bust for the economy, or somewhere in between. One thing is for certain, the home buying market today remains extremely strong and interest rates remain very low.

For more information concerning real estate or home mortgages, be sure to contact Alex Echeandia today.

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