While the housing market is already a shaky industry in the middle of the ongoing effects of the pandemic, the 2020 presidential election is also creating more uncertainty. That uncertainty sparks questions on where the next leader stands on issues such as the US economy, tax policies, and spending policies.
The 2020 elections are crucial for the housing industry as to how each candidate approaches the housing crisis as it could have a long-lasting effect on many Americans.
Each political party has shared its stance in the housing market and it is important to see how their decisions could shape the market for years to come. Where each candidate stands has a direct effect on when Americans are choosing to buy.
According to Redfin survey of more than 1,400 residents, 22 percent of home buyers and sellers said the presidential election is impacting their plans to buy or sell a home.
While former Vice President Joe Biden has outlined a plan to help first-time buyers purchase a home, Trump’s previous actions outline where he might potentially stand on the issue of the housing crisis.
However, the Senate, House of Representatives, and state and local governments could also change the policies and spending regarding the housing market.
While Biden’s plan has been criticized for being tough to achieve, Trump has been criticized for helping to support higher class households and hurting opportunities for low-income households.
Trump has enacted tax changes to encourage new developments and investments in poorer neighborhoods while also lowering mortgage interest deductions where owners can write off up to $750,000 on their home according to Realtor.com. While this didn’t affect many homeowners, it hurt the bank balances such as New York City and San Francisco who saw even higher prices.
Biden’s plan includes a down payment tax credit of up to $15,000 that first time home buyers could use to help fund the deal.
Realtor.com has explained that Trump has capped property, income, and sales tax deductions at up to $10,000 in total at the end of 2017.
Biden is also pledging to help fight the racial housing gap that has resulted in lower homeownership as well as cut the carbon footprint of the country’s buildings in half by 2035.
The Trump administration is planning a proposal to “privatize Fannie Mae and Freddie Mac, which could affect generations of future home buyers.” Meaning a government-run company that holds for half of 11 trillion in a U.S. mortgage market could potentially raise mortgage rates with more and stricter capital requirements.
An election is just a number of factors that are affecting the supply of homes and rising prices at an exceptionally high rate.
“Sales of an existing home rose higher than expected 9.4% in September to a seasonally adjusted annualized rate of 6.54 million units,” according to the National Association of Realtors.
However, many are choosing to side-line until the election surpasses and we get a clearer image of what the next four years could look like. This could potentially be why so many are choosing not to sell their homes at this given time.
While quarantine brought the market to a halt, the lifting of restrictions brought new homebuyers to increase the market once again with record-low mortgage rates. While others are choosing their space to fit their new lifestyle of staying home, others are choosing based on if the community has the same political views.
According to realtor.com, “We found that 55 percent of Americans consider it important to live in a place with people who share their political views.” This data ranges in age as older Americans find the alignment of their political views as most important in finding their home.
While others are choosing for more spacious homes in order to now use their house as an office or to teach, many are choosing to move away from the larger cities after the pandemic hit those areas the hardest. Since all the swing states are being particularly looked at his year, the number of residents moving could potentially change this outlook.
“COVID19 helped exacerbate some trends that were happening before. There’s no doubt people are moving out of some of these higher-tax states, like California and New York, (and into states) where homes are more affordable, taxes are lower, and jobs more plentiful. That obviously has electoral complications,” says Jonathon Bydlak, interim director of the governance program at the R Street Institution.
As we proceed closer and closer to the presidential election, the 2020 real estate market is hit with even more challenges years than before. We just have to wait and see how the housing market will turn after the elections.
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