The outcome of the presidential election has called into question prior indicators of an interest rate rise in December, with analysts now expecting the Federal Reserve to keep the key rate unchanged as markets respond to the result. Housing, currently, is projected to maintain relatively status quo.
“The lead-up to the election had no impact on home sales or demand; pent-up demand, historically low mortgage rates, relatively strong job creation, and significant demographic tail winds created the best real estate market in a decade,” says Jonathan Smoke, chief economist, realtor.com®. “Because our November elections come at one of the slowest times of the year for sales, it’s unlikely we will see much disruption to the normal seasonal pattern.
“However, if the outcome has a big impact on financial markets that lasts more than a few days, we could see some disruption beyond the usual seasonal decline,” Smoke adds. “Unfortunately we don’t have a comparable period in history with good data to draw any sharper conclusions.”
“The National Association of Home Builders [NAHB] congratulates Donald Trump on his election as the 45th President of the United States of America and all the lawmakers who were elected to the 115th Congress,” said NAHB Chairman Ed Brady in a statement. “When President-elect Trump takes the oath of office in January and the 115th Congress convenes, NAHB looks forward to working in a bipartisan manner with the incoming administration and Republican and Democratic congressional leaders to tackle critical issues facing the housing industry.
“Specifically, policymakers need to reform the regulatory process, ensure creditworthy homebuyers and small businesses can get mortgages and loans, protect the mortgage interest deduction and expand the Low Income Housing Tax Credit,” Brady continued.
“It is also essential to enact comprehensive housing finance reform that safeguards the 30-year mortgage. This pro-housing legislative and regulatory agenda will spur job growth and keep the housing and economic recovery moving forward.”
The Fed alluded to a rise in the key interest rate in December of this year following a divided vote in September. The last hike occurred in December 2015. Mortgage rate movement is generally determined by the key rate.