Is Trump a Negative for the Housing Market?
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Version 0 of 1. At first blush, real estate industry professionals saw a lot to like with the election of Donald Trump to the presidency. Trump was and is pro-business, and he made his billions in the commercial real estate sector. This, real estate pro's thought, is a guy who has the industry's back. But not every real estate specialist views the Trump presidency as a net positive. Take Tommy Sowers, from GoldenKey, a real estate technology platform with locations in San Francisco and Durham, N.C. Sowers holds a "strong belief" that President Donald Trump will actually be detrimental for the real estate industry, making it less affordable for Americans to buy homes. "During the campaign, Donald Trump spoke about home ownership numbers being the lowest they have ever been since 1965 at 62.9%," says Sowers. In a nation where homeownership is seen as synonymous with the American dream, it's no surprise that he wanted to highlight this low rate and suggest ways to increase it, he says. "The reality is that his policies and actions indicate the opposite," he says. Sowers lists several reasons why Trump may not be the industry savior some real estate professionals might have counted on: Rising interest rates - "While this responsibility sits with the Federal Reserve, which has kept interest rates low in recent years, Trump has blasted them for doing this stating that they are 'creating a false economy,'" Sowers explains. "Most economists predict that interest rates will now rise in 2017." Dismantling Government Sponsored Enterprises (GSEs) - "During the 2008 financial crisis, the taxpayer bought out Fannie Mae and Freddie Mac and now under government control they play a greater role than before the crisis in sustaining real estate sales and providing liquidity to the housing market," Sowers says. "Trump wants to privatize them - a shake up to this arrangement could mean that banks stop offering the lower cost 30-year fixed rate mortgages." |