Will a Real Estate Mogul Be Good for the Housing Market?

Presidential elections always shake up the stock market, and in turn, the real estate market. With our real estate market finally coming back, especially in Florida, this is a very large concern among economic forecasters and those with houses to sell or buy.

The housing market took a backseat to a lot of contentious issues in the 2016 presidential election cycle. Many people are unclear of where the new president stands and what he plans to do on housing, but he did mention he was not in support of the U.S. Department of Housing and Urban Development. Clinton, on the other hand, had mentioned her goal was to earmark $25 billion of her proposed $125 billion Economic Revitalization Initiative for facilitating homeownership among households that have been traditionally underserved or disadvantaged.

Buying a New Home? Questions about Closing Costs?

Get the answer with the Homebuyer’s Guide to Understanding Closing Costs.

GET THE GUIDE

How the Stock Market and Housing Market Are Linked

Historically, the stock market shows signs of uncertainty far more quickly than that of the housing market. Although stocks plummeted after the initial election shakeup (most news sources and polls predicted Clinton would win), they have since rebounded. When the stock market is shaky and investors lack confidence, they traditionally look for more solid ground. That often takes the shape of mortgage-backed securities. This helps keep mortgage rates low — a boon to investors, buyers, and sellers.

The real concern with the housing market is the interest rate. Industry professionals have predicted rate increases for a while now and insiders are wondering what the Fed will do. Is a rate hike inevitable but in our distant future? Or is it fast approaching? Some of the data the Fed considers when deciding on a rate hike is the employment report.  November’s employment report is believed to pave the way for a rate hike. The report showed a seasonally adjusted 178,000 new jobs and 4.6% unemployment, its lowest rate since August of 2007.

Pundits Ring In on the Short-Term Housing Market

Since so little was said on the campaign trail about housing, it’s difficult to predict exactly where the market will go. All jokes aside about half of Hollywood moving to Canada, Ralph McLaughlin, Chief Economist at Trulia.com predicted, “Home buyers in economically healthy blue states will likely be rattled and more hesitant about the future of the U.S. economy, which will curb their interest in making large investments. In economically stagnant red states, on the other hand, home buyers will likely feel a surge of confidence that could bolster demand.”

We wrote about the correlation between political battleground states and property values prior to the election and cited a report from Trulia that captures a lot of public sentiment of which candidate would bring a higher price for homes. The Harris Poll on behalf of Trulia revealed that 47% of Democrats believe housing prices would rise under Trump (33% of Republicans agreed) as opposed to 24% (38% of Republicans) who said the same about Clinton. For now, we’ll have to wait and see.

At BNTC, we’ll continue to watch these trends and keep you apprised of what we’re seeing. We believe an informed customer is the best kind. If you’re looking for a title company that places the customer first and offers a better closing experience, contact us today.