What Does A Trump Presidency Mean For Real Estate?

By
Real Estate Sales Representative with Castles Unlimited®

Whether you’re horrified or elated over the results of this week’s election, one thing we can all agree on is that the new President will undoubtedly influence our nation’s economy and by extension the housing market.

The last time a real estate dealmaker held the office was in 1790s and early 1800s when George Washington and Thomas Jefferson lead the nation. They were proud property owners and as such made sure the US Constitution protected them.

But things have definitely changed over the past 200 years and so now we’re left wondering, what does a Trump presidency mean for the real estate market. Here are eight things to consider.

Will he, as others have, use real estate to jumpstart the economy?

Obviously, Trump has an extensive background as a real estate investor. He hasn’t said much about housing but what he has said would, in theory, boost homeownership. His platform centered on deregulating the financial market in the hope of reviving it. This alone could boost real estate activity. 
So what about mortgage rates?

There are a huge number of factors affecting mortgage rates and they change daily based on market activity. For example, on election might we saw a bit of market panic due to the unexpected results. Similarly, after Brexit, markets dropped after an unexpected outcome.

“Mortgage rates are falling because investors are seeing safe yields in US mortgage backed security reflecting their confidence in the relative safety of the US housing market. 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.”

-Ralph McLaughlin, chief economist at Trulia

What about loans?

One way to encourage consumers to purchase homes would be to lower premiums for FHA loans or cut guarantee fees for Fannie Mae or Freddie Mac. However, neither have been specifically mentioned and both present their own set of problems.

Will federal programs be downsized?

In the past, federal programs have been cut to trim the national budget. Some programs have more of an effect on real estate than others – i.e. affordable housing. Local and state policies are unlikely to be affected but federal programs like Low Income Housing Tax Credit and Section 8 housing could be facing change.

So what exactly are these regulations he wants to get rid of?

  • Banking regulations: In July, the Republican party approved its 2016 platform which includes major changes to the Consumer Financial Protection Bureau (CFPB) and the possible revocation of the Dodd-Frank Act – which imposes regulations on lenders. Loosening these regulations on lending could boost homeownership by making it easier to get a loan.
  • Building regulations:  In August, Trump addressed a meeting of the National Association of Home Builders saying, “There’s no industry, other than probably the energy industry, that is more overregulated than the housing industry…Twenty five percent of costs build a house are regulations. I think we should get that down to 2 percent.” If he follows through, that could mean more affordable homes for consumers.
  • Independent contractor regulations: If Trump goes through with his promise to get rid of some or all of Obamacare, which could mean lower operating costs for small businesses. It could also mean that agents are no longer required to get their own health y insurance as independent contractors. 

What about mortgage interest deduction?

Last year, a tax plan that Trump shared promised that he would preserve the mortgage interest deduction. However, Trump’s current plan does not go into detail on the matter.

What about Fannie Mae or Freddie Mac?

Both are government-sponsored enterprises (GSEs) and their fate is likely to fall to Trump. The GSEs are projected to run out funds by 2018 so time is running out.

And of course, what is going to happen with immigration?

If Trump tightens immigration policies to the extent outlined in his platform, markets that rely heavily on overseas investors (like Boston) may face a decline. However, until any concrete plans are laid out there’s no way to tell whether it will influence the real estate market on a large scale.

That's all we know for now. As his presidency unfolds and more policy comes into play, we'll see the decisive outcome of President Trump on the nation's real estate market.

This article was originially published in Inman News.

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Rainmaker
3,249,704
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

James

President Elect Trump will be the President in January 2017.  He has 100 day a plan to restart the American economy  which will change the direction of the country for the better . . . . With his plan in place the real estate market will do just find in 2017.

Good luck and success.

Lou Ludwig

Nov 12, 2016 12:16 PM #14
Rainmaker
3,249,704
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

James

Outstanding post . . . . on a very sensitve topic.

Good luck and success.

Lou Ludwig

Nov 12, 2016 12:17 PM #15
Rainmaker
1,970,859
Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

Land sales have increased as the turmoil caused from the deep 50/50 split pulling the curtain in the voting booth plays out. Nervous voters cover their bases. Prepare for simple rural living if they hurriedly have to pull up urban stakes and high tail it following the blue evacuation dots out of the city lights. If you have seen a few real estate cycles, nothing is chicken little or wringing your hands when you remember 16.5% adjustable mortgage rates and oil embargoes of the early 1980's. We'll all adjust our "sales" and survive doing the best we can with what we have no matter who is sitting behind the desk in the oval office. Good things come out of a healthy economy no matter how you slice it, regardless of the alphabet party letter after your name on the ballot.

Nov 12, 2016 07:47 PM #16
Ambassador
605,941
Brian Schulman
Coldwell Banker Residential Brokerage, Lancaster PA - Lancaster, PA
Lancaster County PA RealEstate Expert 717-951-5552

I believe we are near the end of an admittedly anemic expansion cycle and are probably headed toward a recession.  Trump's pro-growth policies will probably counteract and moderate the coming recession, and lead to great economic growth in the future.

Nov 12, 2016 09:17 PM #17
Ambassador
2,389,818
Fred Griffin Tallahassee Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

   It is not so much about Trump, as it is about the repudiation of Government, of the Big Banks and the Elites, of the MSM that is in collusion with the Government.  Americans are exuberant.

   The downside is that the Fed, the Elites, and the NWO have been propping up Obama with artificially low interest rates and bogus employment numbers.  Now that they are out of power, they will let the rates go up; they will let it be known how bad the Economy really is.

Nov 12, 2016 09:52 PM #18
Rainmaker
2,515,579
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Its not so much Trump as it is breaking a dysfunctional cycle that we know doesn't work. Repairing something so that it runs until its next failure is the definition of insanity. People, the majority, are tired, have ill health, poor income, lack of work, and just making a living to get by is difficult. If the USA was a business, it would have failed decades ago. If it becomes a business, take a look at any successful one and you will see what it takes and how simple it is

Nov 12, 2016 09:58 PM #19
Rainer
281,573
Chris Lima
Atlantic Shores Realty Expertise - Port St Lucie, FL
Local or Global-Allow me to open doors for you.

I love this post and the fact that the comments are respectful and insightful.  Great job, Rainers!

Nov 12, 2016 10:22 PM #20
Rainmaker
2,115,894
Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Flower Mound, TX
Selling Homes Changing Lives

The following paragraph in your blog post: "The last time a real estate dealmaker held the office was in 1790s and early 1800s when George Washington and Thomas Jefferson lead the nation. They were proud property owners and as such made sure the US Constitution protected them.

But things have definitely changed over the past 200 years and so now we’re left wondering, what does a Trump presidency mean for the real estate market. Here are eight things to consider." was written  by Brad Inman earlier this year. Four days ago, Thomas Mitchell, Staff Writer for Inman also wrote a lot of per verbatim what you published on AR and you have been featured. Beware plagiarism is a crime and not tolerated. 

http://www.inman.com/2016/11/09/president-trump-mean-housing-market/?utm_source=weeklyheadlines&utm_medium=email&utm_campaign=sundaysend&utm_content=20161110_hero

 

What does President Trump mean for the housing market?

Nov 12, 2016 11:17 PM #21
Rainmaker
420,716
Matt Brady
Finance Of America - Del Mar, CA
Lending With Competence And Character

If he succeeds in removing the roadblocks regulations have put in place the economy will surge at least for the short term. Rates will go up but that will bring more product to the market as investors see better returns.

If he also removes the guardrails we could see a repeat of some very risky products and inflation of another bubble.

Nov 12, 2016 11:19 PM #22
Rainmaker
559,785
Rob Spinosa
Guaranteed Rate, Marin County, CA - San Anselmo, CA
SVP of Mortgage Lending, Marin County

No outcome would have resulted in all things to all people, so with that in mind I am optimistic that the new administration will take a very close look at the especially burdensome and oppressive aspects of the Dodd-Frank regulation and work to revise or repeal them so that we return to a sensible and cost-effective mortgage experience for the consumer.  

TRID is just one sparkling example of how a rejection of "more of the same" came to pass.  Our industry has spent MILLIONS implementing a provision that is well-intended but clumsily expressed.  Borrowers just want to get their transactions closed but in exchange they have unnecessary waiting periods and mountains of paperwork they can't/don't want to sift through.  It's absurd and I would be willing to bet that in some fashion these sentiments came out at the polls.

The CFPB has run roughshod over our industry, and done so unapologetically for five years.  And as they say in Virginia, "Sic semper tyrannis."

 

 

Nov 12, 2016 11:50 PM #23
Rainmaker
939,626
Brigita McKelvie, Associate Broker
Cindy Stys Equestrian and Country Properties, Ltd. - Lehigh Valley, PA
The Broker with horse sense and no horsing around

James,

Excellent post!  With Trump being a businessman, I feel he will do quite a bit for the small businesses.  America was built by the small businessman, therefore, it should continue instead of the big companies with taking over these small mom and pop businesses.  It is importatnt to support out own, including the little guy.

Brigita

Nov 13, 2016 12:40 AM #24
Ambassador
1,211,136
Ralph Gorgoglione
Maui Life Homes / Metro Life Homes - Kihei, HI
Hawaii and California Real Estate (310) 497-9407

PLEASE NOTE as real estate professionals:  Donald Trump does NOT do what we do.  He does not personally work with buyers and sellers on the most emotional and impactful purchase of their lives, which involves the sanctity of their home.  As we all know, we as RESIDENTIAL real estate professionals, have to wear many hats:  advisor, facilitator, counselor, attorney, friend, confidante, psychologist, etc.  This is all very PERSONAL service to individuals helping them get through a residential purchase.

Donald Trump made money in real estate from the COMMERCIAL sector.  There is no personal hand-holding, no consoling the sellers through the empty next scenario, no helping the widow who lost her husband transition to assisted living, no counseling a couple through having lost their home due to the market turning, no helping parents migrate to an area that they want their children to attend school, no assisting someone personally relocate due to job transfer, no handing the keys over to a first time buyer crying with joy over having acheived the American Dream, no meeting at Starbucks listening, caring and being a friend over their recent divorce and forced decision to sell because of diluted finances, NOTHING at all like any of these types of scenarios that we must service to our clients.  

These type of real estate services takes empathy, compassion, and sensitivity.

Commercial real estate is completely void of of any of those requirements.  I have, and continue to do commercial real estate deals, so I can say first hand that it's all about the numbers.  You need NONE of those human attributes to navigate through a commercial real estate transaction.

So do NOT attempt to attribute Donald Trump into those endeavors that I must endure with my clients every day.

Nov 13, 2016 01:01 AM #25
Rainmaker
2,397,721
Evelyn Johnston
Friends & Neighbors Real Estate - Elkhart, IN
The People You Know, Like and Trust!

It will hopefully be a great transition from the current administration to the next one. We all live and love our Country, we need to pull together and give respect to our President. No matter who you voted for, Trump is our next Leader.

Nov 13, 2016 09:24 AM #26
Ambassador
4,302,956
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

James Lowenstern I hope the immigration policies remain the same - or Boston will have to face the music...lol!

Nov 13, 2016 01:00 PM #27
Rainer
553,691
Sham Reddy CRS
H E R Realty, Dayton, OH - Dayton, OH
CRS

Thaks for sharing those thoughts!!!

Trump has an extensive background as a real estate investor. He hasn’t said much about housing but what he has said would, in theory, boost homeownership. His platform centered on deregulating the financial market in the hope of reviving it. This alone could boost real estate activity.

Nov 13, 2016 08:54 PM #28
Ambassador
1,614,650
Harry F. D'Elia III
RentVest - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

I can only think better than the last eight years of our economy. If does focus on deregulation, building the infrastructure and creation of more jobs, that only means a plus for real estate.

Nov 13, 2016 09:42 PM #29
Rainmaker
3,103,418
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

No one can tell the future/long term with any certainity, however those who study and live economics, can predict short term results. Mortgage rates are also driven by the amount of mortgages being given out. The strict guidelines for loans are keeping the amount of mortgages down which keeps interest rates down trying to attract more people to take out mortgages, Going into winter, a typically slower time for most areas, rates should stay low in the short term for mortgages. Opening up lending criteria to those who are qualified, but do not meet the strict guidelines now, can and will make the market boom. How quick that may happen though, is yet to be seen. Other short term affects from the election are that the middle and working class have a new hope. They have been beat down the last 8 years with massive insurance hikes, taxes, cuts in employment and losses of good jobs. I too saw this on Inman last week. 

Nov 13, 2016 10:21 PM #30
Rainmaker
1,296,705
Jon Kolsky
Kolsky Realty & Management - Long Beach, CA
Licensed California Real Estate Broker

James Lowenstern ~ my two cents "Donald has conned and lied his way to the presidency." Donald can't possibly fulfill his promises and eventually the rubber will have to meet the road. Buckle your safety belt and prepare for a hard crash landing; I don't trust the pilot

Nov 14, 2016 02:23 AM #31
Rainmaker
812,223
Mike Bjork
Pinnacle Home Loan - Redondo Beach, CA

Interest rates have risen since the election results, along with the Stock Market and Global Yields.  The Fed Funds Futures for December has risen to 85% chance for a Fed Rate Hike.  The No Point loan before the election is now costing the consumer approximately 2.5 points now.  Most of this is due to the campaign premise of lowering the personal and corporate tax basis and re-building the country's infrastructure.  The thought behind it will boost the inflation levels higher than the Fed's 2% comfort level.  Because inflation devalues the profit of the Bond Market, most of the money is leaving the MBS to places like the Stock Market and Treasuries, which is resulting in higher interest rates.  But I agree, there's a lot to look into how Trump's presidency will affect the Real Estate Market.  I think it could be good, even though interst rates rise.  The rise of interest rates is good because that means the economy is doing well.  If economy is doing well, then people are buying homes.  Thanks for sharing.

Nov 14, 2016 02:31 AM #32
Rainmaker
1,676,131
Winston Heverly
Winston Realty, Inc. - Atlantis, FL
GRI, ABR, SFR, CDPE, CIAS, PA

perhaps you should ask those that made comments if they would be willing to change any of their comments thus far, Namely Jon.

Dec 11, 2016 10:34 PM #33
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James Lowenstern

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