Over the last three years, President Trump has made some instrumental moves to help get the housing market back into an upswing.
From the looks of most indicators, Trump will be continuing that same tradition thru the end of his first term, which may be what propels him into the second term.
There seems to be a tradition in the main stream media around Washington to take a break in the first month that the new president takes office. This allows the president and the staff to get acclimated to the new surrounding and get their bearings before getting swamped by the press. Reports say that Trump didn’t need that down time. He jumped in with both feet and got started on his new position immediately.
In the first week of being in office, Trump reversed a last minute order by President Obama to reduce the Private Mortgage insurance (PMI) premiums which would have reduces monthly PMI portion of homeowners’ mortgage payments by 25%. Not much of an impact on homeowners over all. Trump reversed it before it ever took effect, reports say, because the reduction would not give the FHA enough reserve funds to cover loan defaults if they occurred.
Over more recent years, Trump has limited mortgage interest that could be deducted from 1 million to $750,000 and limited the amount that could be deducted on local and state returns to 10K in some places. This put a bind on the high end housing market as interest dropped and caused some homeowners to move to lower tax states like North Carolina, Arizona and Florida.
Other, more encouraging changes, included a reform of the Consumer Financial Protection bureau (CFPB) created by Dodd-Frank. The over kill of regulations from this department increased loan processing times in the residential and business loans industry (which hurt home buying companies like Real Estate Problem Solver) and reduced the number of loans per month to one third of the numbers they were previously producing.
After the housing bust of 2008, United States government enacted a conservatorship on the top mortgage companies involved in the bust, Freddie Mac and Fannie Mae. During his term, Trump has since released that conservatorship from Freddie Mac and Fannie Mae in hopes to minimize government influence on the housing finance market and encourage competition as they become private companies again.
More recent events that are making the housing market nervous is the tariff wars with China. Currently, imported materials are causing higher prices of new construction. Although continued low interest rates, low unemployment and a promising economy are keeping the housing market steady, a lot is riding on the final word on the negotiations with China.
Another indicator that people are watching to indicate the 2020 housing market is the voting of impeachment of president Trump. Although the impeachment is not likely to get thru the Senate, The entire event could hurt Trump’s changes of getting reelected.
Even if we are graced with a new president after 2020, the chain of events that Trump has put into place should endure for a couple years. As it stands, the current unemployment rate is still low. The regulations and tax reform that Trump put into place early in his term have opened opportunity for small business to make some headway and keep hiring new labor. Add to that, a housing shortage, as considered by housing market analysts, will help inflate prices for the existing housing market in 2020. Though many of the top players in the housing market have been waiting for the “other shoe to drop” on this housing market, it looks like there are enough indicators to plan for a repeat of 2019 prices or a slight climb. Sales are forecast to climb during 2020, but we buy houses in the middle Georgia area and our forecast shows little change for the new year. If negotiations with China prove fruitful for trade, material cost could allow housing prices to drop from new construction and the influx of housing supplied.
For more information please visit – https://realestateproblemsolver.com/