How a Trump 2024 Victory Could Reshape the Housing Market

Experts and recent data suggest that Donald Trump's potential reelection could significantly impact the U.S. housing market, which is currently facing high mortgage rates and escalating home prices.

The housing market is strained by two-decade high borrowing costs and record home prices, affecting affordability for many Americans. As the presidential election approaches, industry specialists are evaluating how Trump's policies - including deregulation, tax changes, and trade measures - might influence the market. These policies could alleviate some pressures but also introduce new risks.

A survey released Monday by National Mortgage News reveals that while many mortgage professionals lean Republican, the consensus is that the next presidential term, regardless of who wins, may not drastically change the trajectory for lenders and mortgage origination activities.

Potential Impacts on Mortgage Industry and Federal Reserve Oversight

Keefe, Bruyette and Woods managing director Bose George expressed that the mortgage industry might not see significant changes due to the upcoming election. This reflects a common belief that presidential influence over economic factors, especially interest rates, is limited, as these are primarily managed by the Federal Reserve.

Despite this, the Wall Street Journal reported in April that the Trump campaign is considering a plan to restructure the Federal Reserve, giving Trump authority over interest rate decisions if he wins in November. Such a move would mark a significant shift, as Trump previously attempted to influence the Fed's rate decisions during his last presidency.

The ongoing Department of Justice investigation into Realtor commissions, which was revived during Trump's final year in office, is expected to lose momentum under a Republican administration.

Potential Impacts on Real Estate Regulations and Government Oversight

Changes in this area could impact real estate transactions and potentially reduce pressure on Realtor commissions. Industry experts believe that a Republican administration might result in a less active DOJ in this sector, which could alter the course of regulatory actions.

Additionally, government control over Fannie Mae and Freddie Mac might shift under a second Trump term. Trump had previously supported ending their government conservatorship, indicating potential renewed efforts to pursue this policy.

Experts, including former Federal Housing Finance Agency (FHFA) director Mark Calabria, caution that full privatization of the housing market would be a complex and lengthy process.

Regarding tax policy, the Tax Cuts and Jobs Act, signed into law by President Trump in 2017, is set to expire in 2025. President Biden supports allowing the cuts to expire, while Trump advocates for their extension, arguing that letting them lapse could harm the economy.

Killmer emphasized the necessity for legislative action to uphold incentives that promote real estate investment, regardless of the election outcome. However, extending the tax cuts would reportedly increase the federal deficit by $4.6 trillion, according to data from the Congressional Budget Office cited in the survey.

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