Political pundits around the country were stunned when Donald Trump secured enough to votes to beat Hillary Clinton to become the next President of the United States. While supporters from both sides are still reeling from emotions, we woke up wondering what that would mean for real estate.
It’s common for the president to use housing as a vehicle to lead economic recovery, and with Trump being a licensed broker, real estate professionals have been keen to see how his policies would affect them.
“The last time we had real estate dealmakers as U.S. Presidents were founding fathers Thomas Jefferson and George Washington, who loved their property holdings and made sure the U.S. Constitution protected them,” Inman publisher Brad Inman wrote earlier this year. “That was a big deal.”
How will an impending Trump presidency change the real estate market? Here are eight possible outcomes.
Will he use real estate to kickstart the economy?
Trump has used real estate himself as an investment, and although he hasn’t said much about his housing platform, what he has said indicates that he’s interested in boosting homeownership.
Much of Trump’s platform has centered around deregulating the financial market in order to more fully revive it, and that alone could also give a boost to real estate.
What will happen to mortgage rates?
Many different factors affect mortgage rates — they change each day based on what the market is doing — and last night, we saw a little bit of market panic, which can be expected due to an unforeseen event (most polls showed a Clinton win).
However, as of this morning, they have already bounced back a bit.
A similar effect was seen post-Brexit, with markets dropping after the unexpected vote to leave the European Union, but a few months later, it’s business as usual again.
The international economy also has an effect on the exchange rate, and there could be some disturbance as the result of an unforeseen event.
“Mortgage rates are falling because investors are seeing safe yields in U.S. mortgage backed securities, reflecting their confidence in the relative safety of the U.S. housing market,” wrote Trulia chief economist Ralph McLaughlin this morning in a statement. “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.”
Read the full Inman article here.