When New York billionaire Donald J. Trump was on the campaign trail to succeed President Barack Obama, his supporters hoped that their candidate's business acumen would translate into a better economic future for the United States. Will this hope extend to the American housing market? Many people believe that President Trump made his fortune from real estate development. This is not entirely accurate; while is it true that Trump inherited substantial real estate holdings, the bulk of his fortune has come from branding and licensing deals that he has attached to commercial properties such as condominium towers, hotels, golf courses, hotels, and casinos. Nonetheless, real estate analysts are expecting to see some changes in the three following areas during the Trump administration:
A Positive Luxury Housing Market
There is no question about the positive effect of a Trump presidency on sales of luxury properties. Lower taxes for wealthy Americans may very well translate into higher sales of upscale real estate, which have been lagging over the last few years as the market normalizes. Buyers from Russia were instrumental in the recovery of the American luxury market after 2008, but this trend subsided due to restrictions in the wake of forced annexation of Crimea. Trump's friendly demeanor towards Vladimir Putin could ease such restrictions in the near future, thus allowing Russian buyers to acquire more US real estate.
A Weaker Fair Housing Act
Social housing initiatives such as Section 8 and protection from discrimination could be attenuated under a Trump administration. History shows that he has been sued along with his late father for discriminating against minorities, and he has also been critical of some programs managed by the Department of Housing and Urban Development. Although these measures could result in higher property values in some housing markets, demand levels would eventually slow down sales and stagnate the market.
Low Mortgage Rates
Despite heavy mortgage regulation during the Obama administration, interest rate were kept at historical lows for various reasons, but mostly because of the Federal Reserve keeping a close eye on the state of the American economy as seen through a global lens. Common wisdom would indicate that a Trump presidency would mean higher mortgage rates due to increased business output; all the same, Federal Reserve officials have observed very high volatility in the financial markets as a result of the surprising results of the election. As long as markets remain volatile, the Fed will keep interest rates low, which is always good news for prospective home buyers.
In the end, the American real estate market stands to improve under a Trump administration, albeit at the expense of some social housing programs that may reduce demand in the long run. You might consider speaking with a realtor at a firm like Marsee Wilhems Real Estate if you have questions about how things will change in your neighborhood.