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Since November’s election, there have been many questions surrounding Trump policies and how they will affect Americans. One of the most common questions has been: “How will the housing market be affected?”
Speculation & debate have surrounded the basic question of “Will A Trump Administration inflate interest rates?”
The Washington Post states that concerns come from “Trump’s lack of housing policy proposals.” While Fox highlights that “The other side of the argument is that the mortgage interest deduction helps homeowners by lowering the cost of their interest on an after-tax basis. This deduction usually benefits first-time home buyers the most.” Despite the uncertainty & various opinions, there are a few facts to keep in mind when it comes to the Trump effect.
The Federal Reserve is a huge factor where mortgage rates lie, along with the inflation of the economy. The President alone cannot solely change the housing market, however, his policies can shape the direction in which the market leans. No one person can set the mortgage rates.
Donald’s policies on issues such as deportation & the Housing Department will set the tone for the direction in which the housing market proceeds. We could see an increase of costs for building a home if Trump sticks to his strict stance on deporting undocumented immigrants. The construction industry relies heavily on undocumented immigrants to reduce building costs through affordable labor. By having to pay more in labor costs, construction companies will have to offset the costs by charging the client (you) more.
We do not know the policies of Dr. Ben Carson, but what we do know is that his appointment as HUD Secretary could affect your monthly mortgage payment. As Secretary, Carson has the power to raise or lower FHA mortgage insurance premiums, which could increase or reduce your overall payment.
All we can do is wait and see what the future holds for us. However, there are a few outcomes that we can expect. Deduction of taxes through a freer market, home purchase costs to fluctuate, and increased mortgage interest rates.
In result, it’s challenging to predict exactly how Trump will affect the housing market, but you can prepare yourself by finding out what your options are for your mortgage. Don’t start panicking just yet; it’s not too late to save yourself some money on your mortgage. With all indications pointing towards climbing interest rates, now is the time to act.