Real Estate Future under Trump Administration

The victory of Donald Trump in the Presidential elections has surprised a lot of people, including political pundits. His recent moves, including travel ban on citizens of 7 Muslim countries, may have alarmed the proponents of status quo but even his critics accept that stock markets and real estate sectors have welcomed his ascendancy to the office of the President. There is certain buoyancy and expectations that reflect the fact that people have many hopes pinned on Donald Trump. With a real estate tycoon having become the President of the country, one cannot belie these hopes altogether. However, there is nothing certain and one must remain cautious and wait for Trump’s next moves to see its long term effects on the real estate sector.

There can be no two opinions about the fact that Donald Trump has made his name and fame, and also a fortune in the bargain, as a real estate developer. Having such an individual as POTUS has enthused people associated with housing, construction, and real estate in general. These people are pinning their hopes on Trump to pursue policies that can give the big impetus that the housing industry requires at a moment. These hopes are reflected in the surge in the prices of stocks of companies listed in the stock market. This increase has refused to die down even after 3 months which is why it has been termed as Trump Rally after the name of the resident.

There might be changes in Dodd Frank regulation Act

So far, Trump has not announced any major housing policy proposals. But the manner in which prices of stocks of financial companies and non banking companies have appreciated in the last three months, there are high hopes among different sectors of economy. There is anticipation among financial companies that Trump would do away with many of the changes of Dodd Frank Act that were introduced by Obama administration to ease policy regulations. With lesser regulatory burdens, banks and other financial institutions would be able to give impetus to the housing industry.

More credit for the borrowers

There are indications that banks could move towards lenient mortgage terms from the present stringent mortgage underwriting. This is a situation where only people with high credit score are able to secure mortgage for buying their dream home. But with normal lending it will become easier for common man to fulfill his dream of buying a home for his family. This will automatically give fillip to the real state sector with demand for new homes going up.

Less regulation on builders to cut down costs

All indications are that Trump administration would relax regulations pertaining to land use. Zoning burden may also be reduced drastically to bring much awaited relief for the builders. These measures would bring down cost of development and building of housing projects. This means prices of newly built homes would be lesser than what they have been in the last decade or so. Builders say that they wrote to Obama administration to do something about these regulations as they added to the cost of the homes. These builders hope that with a real estate developer at the helm of affairs, their pleas would surely be heard.

Pro developer policies mean more new construction

People from real estate sector feel that Trump was and still is a real estate developer. He will always be sympathetic to the demands of the builders and developers and this would be reflected in his policies towards them. Less regulatory burden and tax cut proposals are being awaited by the builders’ community as they believe that once a developer, always a developer. This is the closest that developers can hope to have someone sympathetic to their pleas. It is not yet clear as to how Trump would be pro developers but he will always have the interest of the developers uppermost in his mind.

Interest rates should remain low in 2017 and in future

With a real estate developer at the helm of affairs, one thing that builders and developers can be certain of is that mortgage rates will continue to hover around the present lower levels. This is because the President understands the importance of interest rates for the home buyers. As a result, housing industry should remain strong in 2017 with buyers showing interest in buying new homes. In future, when interest rates get increased because of inflationary pressures, one could witness a steep rise in the prices of homes to further boost the housing sector.

There could be one negative impact on real estate sector because of the policies of Trump administration in future. It is believed that the government is planning to reduce the relief provided in the form of insurance to homes in flood prone areas. Billions of dollars of banks go down the drain in the name of insurance to homeowners whose homes are damaged because of floods. Government is planning better flood control reforms than to give away money to homeowners.