Immediately after Donald Trump won the 2024 presidential election, people began predicting how his next term would affect the markets, including the U.S. real estate landscape.
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The housing market often points to other economic issues, creating a domino effect for American homeowners. GOBankingRates put out the call to economists and real estate experts for their expert opinions on what might happen during Trump’s second term as president.
According to Marty Harlee, president and CEO at First Trust Financial, Trump in office again means “we would see another massive refinance boom along with a record number of home sales,” said
“I predict that Trump would definitely recommend to the Federal Reserve to lower the interest rates. He would recommend this because it is the best and most effective way to move the economy upward quickly — and our current market could certainly stand a boost. Lowering rates would move every other industry upward as well,.
Harlee said this could extend to car sales and refinancing, home equity lines of credit and many other sectors of the economy.
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“Under a Trump presidency, economic policies would likely continue to emphasize deregulation and tax cuts, which could stimulate economic growth and potentially increase disposable income for many Americans,” estimated Dennis Shirshikov, a professor of finance, economics and accounting at the City University of New York.
He predicted that this move could boost the housing market by increasing demand for homes.
“For instance, the Tax Cuts and Jobs Act of 2017, which Trump signed into law during his first term, led to an increase in after-tax income for many individuals and businesses, providing more capital for home purchases and investments in real estate,” Shirshikov explained.
Harlee added, “Interest rates also affect the investment industry, in particular the S&P [500]. Donald Trump is real estate heavy in assets and will definitely try to take advantage of this while he is in office.”
Kateryna Odarchenko, a political strategist who also holds a real estate license in Maryland, said, “The topics of housing and construction are increasingly significant in American politics. The rising cost of living and housing affordability are major concerns for many Americans, with inflation only worsening these issues.
“Donald Trump’s 2024 campaign includes several initiatives related to the housing market and construction sector, building on the policies from his previous term. During his first term, Trump worked on increasing homeownership rates, extending eviction moratoriums during the pandemic, and proposing the privatization of Fannie Mae and Freddie Mac.”
She added, “These efforts have implications for future homebuyers and the housing market at large. His administration also introduced tax reforms such as ‘opportunity zones’ to stimulate investment in underdeveloped areas and capped property, income and sales tax deductions, affecting homeowners differently across the country.”
When examining the possible negative impacts of reelecting Trump and how it would affect the real estate market, Harlee said, “The only downside to a second Trump term would be when rates do come back down, the price of housing will also increase and the supply of available housing will also decrease. In general, interest rates and the housing market always do well with Republicans in office.”
That would mainly be reflected in interest rates and inflation, which are already key topics on voters’ minds when they cast their ballots for the next president of the United States.
“While deregulation and tax cuts can stimulate economic activity, they can also lead to inflationary pressures,” Shirshikov said. “The Federal Reserve might respond by raising interest rates to control inflation, which could make mortgages more expensive and reduce housing affordability. Higher interest rates typically lead to higher monthly mortgage payments, which can deter potential homebuyers and slow down the housing market.”
Shirshikov also noted, “Trump’s tenure was marked by significant market volatility, partly due to his unconventional approach to policy and communication. This unpredictability can create uncertainty in the housing market, causing potential buyers and investors to hesitate.”
Odarchenko said, “I believe that affordable housing programs might be restructured, as this topic is more aligned with Democratic agendas, focusing on development around more diverse communities and promoting diversity.”
Regarding the privatization of Fannie Mae and Freddie Mac, Odarchenko views “these as bold statements similar to the idea of the U.S. withdrawing from NATO. Therefore, I wouldn’t pay much attention to them as realistic outcomes. However, deregulation and the introduction of new tax programs are quite plausible.”
Odarchenko pointed out that two of the main issues for Americans right now are the cost of living and housing affordability amid inflation.
“Thus, the question of housing accessibility is one of the most important for both Democrats and Republicans,” she said. “Considering Trump’s work with developers and his overall background in real estate, these are positive developments for the market.”
Under a Trump presidency, Shirshikov anticipates that “economic policies would likely continue to emphasize deregulation and tax cuts, which could stimulate economic growth and potentially increase disposable income for many Americans. This, in turn, could boost the housing market by increasing demand for homes.”
On a similar note, Odarchenko summed up the notion that “the housing policies highlight the stark differences between the two major political parties. For many Americans, the issues of affordability and accessibility in housing will be decisive factors in the upcoming election.”
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This article originally appeared on GOBankingRates.com: I’m an Economist: Here’s My Prediction for the Housing Market Under Trump’s Next Presidency
