Experts speak out
As the presidential election heats up, questions around housing affordability, mortgage rates and first-time buyer grants continue to dominate debates. But how exactly does the election season impact the housing market? Well, the data is somewhat conflicting.
According to research from John Burns Research and Consulting, the annual seasonal decline in sales isn’t any worse in election years than it is in other years, when comparing 35 years’ worth of data. In election years, new home sales decline by -10% on average, in non-election years sales decline by -14%. However, while market rates tend to fluctuate based on greater economic conditions, the election does add a sense of short-term uncertainty, with a report from Redfin finding that 22% of potential homebuyers hold off on selling specifically because of the ongoing election.
Both Trump and Harris have touched on how their presidency would impact housing – with Harris vowing to expand the low-income housing tax credit, provide $25,000 in down-payment assistance for first-time home buyers, and increase the amount of homes being built. Meanwhile, in the red camp, Trump has vowed to reduce regulations while also opening portions of federal land for large-scale housing construction.
Source: US Census Bureau and US Department of Housing and Urban Development, Median Sales Price of Houses Sold for the United States [MSPUS], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MSPUS, October 28, 2024.
And with the topic of housing affordability not looking likely to die down, the question on many lenders’ minds is how the new presidency will impact the market – or if it will change anything in the long-term. With that in mind, MPA asked a collection of mortgage experts across the country their opinion on how the upcoming election will shift the sector – and how originators can prepare for any potential challenges in 2025.
So, will the presidential election really effect the US mortgage market?
Koorosh Farzad, founder of Masihi Financial Group
“After a presidential election there’s uncertainty. And when the market has uncertainty, you're going to have rates going up. People are going to be a little bit more reserved with their next acquisitions as well. But regardless of whoever wins the president election, you're going to have uncertainty. My belief is that if Harris ends up winning, the uncertainty, I believe will carry on a lot further. Rates would stay higher for longer. With Trump, I believe the uncertainty will only be for a couple months, and then rates will be driven lower and the economy would grow off of that stability.
“Oddly enough, most people, if you ask them, would say the reverse would happen, that you would have more certainty with Harris and uncertainty with Trump. But I actually believe it'll be vice versa.”
Crista Lowrie, VP at First Citizens Community Bank
“I think I think it does affect it. Unfortunately, some years have been better than others, and interest rates have been much lower in prior years. Right now, we have a big inflation problem, and where that actually comes from up here, I'm not sure. However, I'm looking for something different to happen for homebuyers because income is not going up as much as the home prices are.
“Baby boomers are the biggest collection of homeowners currently and they're not selling because there's nowhere for them to go. So until people die, and then the family sells the house, there's a shortage of houses that are affordable. I’m looking for some sort of change, somehow, with whoever gets voted in this time.”
Jonathan Fowler VP of business development at American Financial Network
“There’s a greater majority of consumers that I think are afraid of what rules and laws may change, what may change with anything from Federal Reserve to interest rates to immigration. Personally, I think that’s a mistake, in my opinion. I’m a strong believer in real estate in this country.
“What I do know, without a shadow of a doubt, is this country is resilient – and this country will bounce back. There are more people, there’s are more formations happening every single day, there’s more legal immigration happening every single day. There’s more people coming in and we are millions of homes behind as of right now. We have three generations living in the same property and they're ready to kill each other. We have to look at future wealth.”
Jon Overfelt, owner of American Security Mortgage
“There is a little bit of a slowdown because people are waiting to see this perception of the world's going to go one way or the other. But after it happens, will it make a small difference in the mortgage universe? Yes, it'll either be more regulation or less regulation, but the markets are the markets. People want houses, the consumer is resilient – they’ll figure it out.”
Dale Vermillion, founder of Mortgage Champions
“I believe presidential elections do impact the housing market. Positions towards housing and inflationary controls can vary widely between parties and therefore can certainly have a roll-down effect on policies and rates. Additionally, views on regulation and oversight vary widely and can certainly have a major impact. Finally, the opinions on what to do with the GSEs also vary. All these things, combined, make the presidential pick important. “
Christian J Plocica, chief operating officer at VIP Mortgage Group
“I want to say ‘yes’ and ‘no’. What's really hurting the mortgage industry right now is higher rates coming from inflation. How do you stop inflation? You have to raise everything to try to slow down all the money that's in the economy. Higher inflation means higher rates which has affected this industry in the past two and a half years. So if a president does come in and can have inflation handled, you're going to see lower interest rates and you're going to see more activity. So whoever is the president is, I hope they get it under control because the mortgage industry needs help.”
How do you think the presidential election will impact the housing market? Tell us in the comments.
