The inauguration hasn’t happened yet, so all we can do is speculate but, based on what was said during the campaign, I won’t be surprised to see some of the following:
- Reduction of regulation in Banking. Dodd-Frank created a significant layer of bureaucratic reporting and procedure that banks had to follow. The goal was to ensure that nothing like the great melt-down of 2006 could happen again. It has clearly been in Mr. Trumps sights as well as those of the Republican Congress. Look for an easing of government regulation in the banking industry that may mean easier access to money.
- Reduction of regulation in Construction. Trump has clearly singled this out for action. In an address to the NAHB, the said upwards of 25% of the cost of new housing is compliance with government regulation. His goal is to get that closer to 2%. In addition to having home builders dancing in the street, this might mean more affordable housing.
- Easing of lending requirements on government backed mortgages. Though not much has been said about Fannie Mae, Freddie Mac and FHA, it would stand to reason that, given the easing of regulations in other areas, a relaxing of guidelines here will happen as well. It could put home ownership back into the realm of possibility for many.
- What about the mortgage interest deduction? Some in Congress have had their sights set on this for years. Mr. Trump said he wasn’t going to take it away – but that was a campaign promise. His plan to reduce corporate taxes and initiate new tax cuts for the wealthy may stimulate the economy, but the money to run the government is going to have to come from somewhere. I’m not suggesting we’re going to lose that deduction, but I am saying it might be vulnerable. That’s a very good reason to contribute to RPAC (The Realtor Political Action Fund). They have been successfully fighting for that deduction and for home ownership for decades.
So what does a Trump Presidency mean for those of us who work in real estate? Based on what I’ve said above, the outlook could be good. It could mean easier access to mortgage money and lower prices, which could mean more activity. Could. It also could mean we have to be very careful not to get back into the kind of mess we had a decade ago.
By the way, let me just state what might not be obvious. This is not a political post. I’m not a Trump or Clinton supporter. I’m not a Democrat or a Republican. I don’t beat the drum or wave the banner for either side. I’m a Help-U-Sell Real Estate Professional and I watch the market every day for clues as to what’s on the horizon. As of today, being the positive person I am, this is what I see.