Today Donald J. Trump becomes leader of the free world. Trump made his fortune through real estate – if you’re wondering what impact we might see for the real estate market, we’ve gathered a few professional opinions:
- The good news is: mortgage rates are likely to stay low. However, this is due to investors choosing safer investments (such as mortgage-backed securities) in politically uncertain times. Experts like Jonathon Smoke, chief economist at Realtor.com have concerns about the long-term effects this kind of investor behavior will have on our economy. (Source: The Washington Post)
- If Trump succeeds in reducing housing regulations (as reported by Business Insider), home construction costs would decrease – which means more people could be in a position to buy homes. However, supply must be carefully balanced with increased demand, or we will see home prices skyrocket. (Which would be the opposite effect that Trump intends.)
- If Congress agrees to Trump’s plan of cutting taxes and consolidating the seven tax brackets down to three, we might see buyers increase in luxury markets. However, it could also mean higher interest rates and down payments for those in other tax brackets. (Source: Realtor.com)
- Stan Humphries of Zillow.com believes our new President hasn’t offered a clear plan to fix issues with the housing market and he worries Trump may go too far in reducing housing regulations. Trump is in favor of the mortgage interest deduction which often only benefits the wealthiest of Americans. (Source: Fortune.com)
Since housing policy was not a prominent theme of his platform or campaign, we will have to give President Trump some time on the job to see if any of these assumptions and projections come to pass. Stay tuned – we will keep an eye on the market and let you know what upcoming changes might impact you.