As the 2024 presidential election draws near, the US housing market is poised for significant shifts depending on the outcome.
Donald Trump and Kamala Harris present contrasting policies that will directly impact real estate, from interest rates to affordable housing initiatives.
Kamala Harris: stability and affordable housing focus
If Kamala Harris wins, experts anticipate a continuation of the Biden administration’s efforts towards affordable housing and economic equity.
Rick Kuci, COO of FundKite, stated, “If Kamala Harris wins the election, the housing market might see more affordable housing projects and increased opportunities for first-time homeownership.”
Ms Harris has strongly supported measures to cap rent increases and inject significant funding into affordable housing developments.
These policies aim to stabilise housing prices and make homeownership more accessible, especially for first-time buyers.
Economic stimulus is also expected under a Harris administration, with increased spending on social programs and infrastructure. This could indirectly support the housing market by boosting job creation and consumer confidence, gradually increasing housing demand.
Nevertheless, her administration might continue the current trend of higher interest rates to curb inflation, potentially tempering housing demand and slowing the pace of price increases.
Donald Trump: deregulation and market stimulation
Conversely, if Donald Trump wins, the housing market could experience a surge in activity.
Marty Harlee, president and CEO at First Trust Financial, predicts: “If former President Donald Trump should win the upcoming election, we would see another massive refinance boom along with a record number of home sales.”
Mr Trump is likely to push for lower interest rates, stimulating the economy quickly and making borrowing cheaper, which would boost home sales and refinancing.
“Lowering rates would move every other industry upward as well,” said Mr Harlee.
Mr Trump’s economic strategy would likely continue to emphasise deregulation and tax cuts, as seen during his first term, according to Dennis Shirshikov, a finance professor at the City University of New York.
“Under a Trump presidency, economic policies would likely continue to emphasise deregulation and tax cuts, which could stimulate economic growth and potentially increase disposable income for many Americans.”
This could drive demand for homes as more capital becomes available for property investments. However, Shirshikov also warns: “While deregulation and tax cuts can stimulate economic activity, they can also lead to inflationary pressures.
“The Federal Reserve might respond by raising interest rates to control inflation, which could make mortgages more expensive and reduce housing affordability.”
Market outlook
The 2024 election outcome offers two distinct futures for the housing market. A Harris administration is likely to focus on affordability, stability, and eco-friendly development, providing a long-term balanced approach. However, the emphasis on regulation and higher interest rates could moderate growth. On the other hand, a Trump presidency might prioritise immediate market stimulation through lower rates and deregulation, driving a housing boom but risking inflation and long-term market volatility.
As Kateryna Odarchenko, a political strategist and real estate licensee, summed up, “The housing policies highlight the stark differences between the two major political parties. For many Americans, the issues of affordability and accessibility in housing will be decisive factors in the upcoming election.”
