Tue, December 06, 2016
Guest article by Brian Koss of Keller Williams Classic Real Estate - Team Koss
We can all agree, the 2016 Election was one for the history books. Both pollsters and financial experts alike, failed to predict the outcome of the election, as well as its impact on the economy.
Wall Street overwhelmingly supported Secretary Clinton's campaign. Some in the financial community predicted an almost doomsday-like scenario if Trump were elected. Yet, in the days following Trump’s victory, markets rallied to record-breaking heights. This spike is perhaps attributable to investor’s realization that Trump’s proposed tax, health, regulatory and energy reforms, as well as projected investment in infrastructure, would create a pro-growth environment.
So what impact will President elect Trump, have on the residential real estate market?
If Trump’s policy agenda is enacted, forecasters expect at least a short-term boost to the economy. As a result, we are likely to see more jobs, rising incomes and a lower tax burden. Theoretically, this could result in more money in the pockets of homebuyers. Thus, renters may be incentivized to buy.
On the flip side, Trump’s pick for Treasury Secretary, Steve Mnuchin, has expressed support for privatizing Fannie Mae and Freddie Mac and has called for more scrutiny on government-backed loans. There has already been an increase in mortgage rates post-election, and the December meeting of the Federal Reserve may result in a slight increase in interest rates.
There is no clear consensus on the impact of a Trump Administration on the residential real estate market. Some experts advise those looking to buy or refinance should be patient as rates stabilize; while other experts suggest buyers should buy now in order to lock in lower rates.