The 2024 presidential race is heating up, and with election day drawing closer, Americans are eagerly anticipating what the future holds. One key area of interest is the U.S. real estate market and how it might be impacted by a potential second term for Donald Trump. GOBankingRates reached out to economists and real estate experts to gather insights on what could happen to the housing market if Trump were to win the election.
Lower Finance Rates
Marty Harlee, president and CEO at First Trust Financial, predicts that a Trump victory would lead to a massive refinance boom and a surge in home sales. He believes that Trump would push for lower interest rates, as it is a proven way to stimulate the economy quickly. Lower rates would not only benefit the housing market but also other industries such as car sales, refinancing, and home equity lines of credit. This could have a positive domino effect on the overall economy.
Tax Cuts Boosting the Housing Market
Dennis Shirshikov, a professor of finance, economics, and accounting at the City University of New York, suggests that under a Trump presidency, continued emphasis on deregulation and tax cuts could stimulate economic growth. This could potentially increase disposable income for many Americans, leading to higher demand for homes. The Tax Cuts and Jobs Act of 2017, signed into law by Trump during his first term, resulted in increased after-tax income for individuals and businesses, providing more capital for real estate investments.
Housing Prices Might Increase
While a second term for Trump could lead to lower interest rates and a boost in the housing market, there could be downsides as well. Harlee points out that when rates eventually come back down, housing prices could increase, and the supply of available housing might decrease. However, historically, interest rates and the housing market have performed well under Republican administrations, suggesting that a Trump reelection could have positive implications for the real estate market.
Inflation Spike Rates Again?
Shirshikov warns that deregulation and tax cuts, while stimulating economic activity, could also lead to inflationary pressures. The Federal Reserve might respond by raising interest rates to control inflation, making mortgages more expensive and reducing housing affordability. Higher interest rates could deter potential homebuyers and slow down the housing market. Additionally, the unpredictability of Trump’s policies and communication style could create uncertainty in the housing market, causing hesitation among buyers and investors.
Affordable Housing Programs and Market Accessibility
Kateryna Odarchenko, a political strategist and real estate licensee, highlights the importance of affordable housing programs and market accessibility in the current political landscape. She believes that housing policies under a Trump presidency could focus on increasing homeownership rates, extending eviction moratoriums, and proposing reforms to stimulate investment in underdeveloped areas. However, she also notes that restructuring affordable housing programs aligned with Democratic agendas could be a possibility.
In conclusion, the 2024 election will have significant implications for the U.S. housing market. The contrasting approaches of the two major political parties on issues of affordability, accessibility, and regulation will shape the future of real estate under a potential Trump presidency. As voters weigh their options, the housing market remains a critical factor in their decision-making process.