Will Trump “Make the Housing Market Great Again?” Team Thayer #realesate #housing #market #economic #news
Despite the fact that President-elect Donald Trump addressed the topic of the housing market and its various sectors only marginally throughout his road to the presidency, as a business mogul, it is safe to assume that when it comes to making decisions that impact the industry, Trump will rely on his financial knowledge to steer his judgement.
Laurie Goodman, Co-Director for the Housing Finance Policy Center at the Urban Institute says that Trumps perspective as a businessman could make a big difference in several aspects of the market including housing supply.
“We figure new single-family housing plus new multi-family housing plus manufactured housing minus obsolescence is about 430,000 units short of new household formation,” says Goodman. “So supply constraints are huge and what that does is put upward pressure on both prices and rents and create affordability problems. In turn, those affordability problems are expected to get worse over time.
Given that Trump is a businessman that understands supply constraints and can think about ways to put pressure on state and local governments (because this is a state and local issue), eliminating supply constraints would be a business-friendly thing to do and very helpful thing to do,” adds Goodman.
Daren Blomquist SVP for ATTOM Data Solutions says that Trump’s victory could be a catalyst for other sectors of the market such as foreclosures.
“With foreclosures, we expect a short-term uptick in activity into early next year as banks have more confidence as to who is in place,” says Blomquist. “Trump brings less fear of regulation on foreclosures and I believe we will see the backlog of foreclosures being pushed through.”
On the flip-side of the equation, when it comes to loan originations and potential homeowners looking to enter the market, according to his recent commentary, Trulia Chief Economist Ralph McLaughlin says Trump’s election will both help and hinder consumer confidence.
“Homebuyers in economically healthy blue states will likely be rattled and more hesitant about the future the U.S. economy, which will curb their interest in making large investments,” says McLaughlin. “In economically stagnant red states, on the other hand, homebuyers will likely feel a surge of confidence that could bolster demand.”
Blomquist says that he doesn’t believe sales will be impacted based on the election results one way or another.
“I don't think the sales trend will be heavily effected. We started see sales slowdown before the election and that could have been in part because of the uncertainty,” says Blomquist. “I think we will see a short-term uptick in sales as people are more confident and have certainty. But the overall downward trend we are seeing in sales is slowing down and I believe we will continue to see that because of affordability constraints.”
When it comes to a long-term forecast for how the market will react to this new administration, the future is somewhat murky.
“What the long-term really depends on is what housing policies Trump puts into place," says Ralph DeFranco, Chief Economist at Arch Mortgage Insurance. "My sense is that he is going to help on the demand side of the equation and that would improve the homeownership rate over the two plus year horizon."