Home ownership is synonymous with the American Dream. It is the foundation on which the country was built. So why then is home ownership at an all time low?
Enter President-Elect Donald Trump and the numerous ways his presidency could affect the housing market.
1. His transportation and infrastructure plan should create jobs and boost wages which in turn should lead to a greater housing demand. However, his statue on illegal immigration could limit price growth.
2. Trump believes that the lack of inventory is due to the high cost of regulation (25%) which he believes should be closer to 2%. While most regulations are set at the state and local level where his voice should have little sway, Trump is, if nothing else, a guy who builds buildings. So maybe he knows a thing or two.
3. Mortgage rates affect home ownership as much if not more than anything else and with the FED pushing to move faster, rates could jump even higher and home values would flatter, maybe even decrease. It is believed that Trump will have a lot of say in this. It is believed he will move the government controlled Fannie Mae and Freddy Mac Mortgages to private hands as well as undo the Dodd Frank act which as he put it, “simply does not work for the working people”.All in all, if the dismantling goes as planned, Trump’s presidency should make it easier for banks to lend to average americans which would in turn increase the buyer populations and increase home sales and prices.
The biggest danger is in loosing the regulations to the point of another housing bubble.
As they say, only time will tell.
*information gathered from Forbes.com
