There has not been a lot of talk about the housing market in this year’s election. However, the choice of presidential candidate will affect the housing market directly. So how will the housing market fare under either major party candidate?
“In order to gauge which candidate would favor the U.S. housing market, one has to look at their wider economic policies and see how they would trickle down to housing,” writes CNBC, in “How housing would fare under Clinton, Trump” (November 2).
“What we’ve really gotten is more directional conversation: One party talking about affordable housing, the other party talking about deregulating a financial market that seems to have largely seized up,” said Rick Sharga, executive vice president of Ten-X, an online real estate marketplace for investors.”
“Clinton does have the advantage of building on a framework already in place under the Obama administration,” writes CNBC.
“She has advisors like Jim Parrot and Gene Sperling who have already put out white papers looking at what to do about Fannie and Freddie, there’s already a perspective with what to do about the FHA program, so she is ready to hit the ground on Day One,” said [Jaret Seiberg, managing director at Cowen Group, a financial services company.]
Clinton has also put forth proposals to increase homeownership, which is now hovering near record lows. She has promised to provide down payment assistance to “underserved” communities.
“Specifically, the plan would match up to $10,000 in savings for households who earn less than area median income to put towards a down payment on a first home. On the plus side, that will encourage some households to save more. But we doubt it will be a game changer in terms of getting more people onto the housing ladder,” noted researchers at Capital Economics.
“The focus on down payments ignores the fact that it is the need for a high credit score which is preventing many Americans from buying. And even if the proposals do help more people to buy, the eventual outcome will be higher house prices, benefiting existing rather than potential homeowners.”
“Republican Donald Trump, a real estate mogul who has invested largely in hotel and multifamily housing development, has said even less about housing than Democrat Hillary Clinton, but the GOP platform is clearer when it comes to the financing side of the business.
“We’re really seeing a lot more discussion about things like reforming or rejecting the Dodd-Frank [financial reform] bill. We’ve seen a lot of discussion about easing regulatory burden on the industry which was put on it by Dodd-Frank and by the CFPB [Consumer Financial Protection Bureau],” said Sharga. “The contention seems to be that some of the rules established in Dodd-Frank and the CFPB make it difficult for qualified borrowers to get a loan and make it difficult for lenders to justify making loans because of the regulatory and litigation risk.”
Given that Trump’s track record is all in multifamily housing, his thoughts on the single-family market, which comprises most of the nation’s housing, is the big unknown.
“But clearly his whole campaign is about growing the economy and smashing through regulations, so I think you could see real upside with Trump, provided the economy and the other parts of his agenda don’t derail it,” said Seiberg.”
*Note: The Grossman Group does not officially endorse either major party candidate. This is for informational purposes only.
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