A Second Trump Administration Could Reshape America’s Real Estate Market

Wall Street reacted positively to Tuesday’s election results, but the long-term economic impact of President-elect Donald Trump’s second term remains to be seen. Homebuyers and sellers, for example, could encounter a significantly different market — for better or worse — under a new Trump administration.

Some things change

Analysts have interpreted Trump’s campaign platform in various ways, but there are a few relevant aspects that could have a direct impact on the housing market, including:

• Mortgage rates: Since investors are generally predicting an economic boom in response to Trump’s election, there’s the associated possibility that inflation will remain a factor for some time to come. In response to such a scenario, the 10-year Treasury bond (and in turn mortgage rates) could remain high or even increase.
• Home prices: If Trump implements a large-scale policy of imposing tariffs on imported goods, the result could be an increase in the cost of materials used to build houses. A stricter immigration policy might also result in higher labor costs. If so, the end result could be more expensive real estate.
• Tax incentives: Some price increases associated with Trump policies might be offset by efforts to boost new home construction — and affordable housing in particular — by providing home builders with an attractive tax deal. Decreased regulations could also spur additional construction.

Some things stay the same

As with any new administration, particularly one from a different party than the outgoing president, there will be some policy shake-ups. But when it’s all said and done, there are limits to the amount of influence any president has over the real estate industry.

Trump’s critics are concerned he’ll make things worse and his supporters hope he’ll fix many of the market’s problems. The truth, however, is that things might not end up changing all that much at all.

Chris Agee November 8th, 2024

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