Trump could make the housing market boom for buyers


A Trump presidency could turn out to be a real boon for home buyers. That’s because the Donald has promised to cut taxes and shrink the number of tax brackets from seven to three. This could, in theory, leave buyers with more money to spend on the homes of their dreams. It could also give the luxury market, which has been slowing down as of late, a boost too.

Real estate analysts have been quick to point out however that some of the reforms laid out in the Republican platform could potentially force buyers to plunk down larger down payments or pay higher interest rates. That could be problematic for those without a few extra million dollars in their bank accounts.

It appears that the Republican Party, wants to do away with - or at least substantially shrink - both Fannie Mae and Freddie Mac, although the language in the platform was a bit vague. It referred to the business models of the pair as “corrupt” and allowing “shareholders and executives to reap huge profits while the taxpayers cover all losses.” Trump hasn’t yet provided a replacement plan for the current system, which relies heavily on both Fannie and Freddie.

The Republicans have also pledged to stop the FHA from providing taxpayer-guaranteed mortgages to wealthy home buyers. The FHA typically insures loans for low-income, first-time, and other buyers who don’t have enough for a 20% down payment.

The Republicans have stated they want to repeal - or at the very least, limit - the Dodd-Frank Wall Street Reform and Consumer Protection Act. The act provides more oversight of financial institutions in the wake of the housing bust that plunged the nation into a recession.

Trump’s party also wants to get close the Consumer Financial Protection Bureau (or subject it to congressional appropriation). The bureau, created through Dodd-Frank, is charged with protecting consumers against predatory financial services companies, including those providing mortgages.

Dodd-Frank and agencies such as the CFPB are key to ensuring financial markets are kept in check and act fairly, says Edelstein.

However, Republicans allege that its “regulatory harassment of local and regional banks, the source of most home mortgages and small business loans, advantages big banks and makes it harder for Americans to buy a home” in the platform.

No one at Abode2 has a crystal ball to see into the future of residential real estate under America’s new commander in chief. But it doesn’t look like demand from aspiring home buyers will taper off any time soon.

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