The Home Buying Impact of a New President
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With most change comes a lot of uncertainty and this presidential election is no stranger to change. The Trump presidency promises many new changes and regulations (OR deregulations), many of which will effect homebuyers. Let’s take a look at the potential impact of President Trump’s agenda.
Mortgage Insurance Premiums
Prior to our new Commander in Chief taking office, the Obama administration planned to reduce Mortgage Insurance Premiums for FHA loans. The potential result of this reduction could have saved FHA loan borrowers hundreds of dollars per year. As Trump took office, one of the first executive orders he signed was to suspend the FHA MIP cuts indefinitely so his administration could review the plan.
What does this mean for homebuyers?
For first time homebuyers, specifically, it means that you’ll need to do a little more research to understand if an FHA or a conventional loan is right for you. For those who have good credit, you’ll want to look at all of your options and determine which best suits your needs. For those with poor credit, you’ll likely need to look into an FHA loan. Start with some online resources, tap into the knowledge of your realtor or speaking with your lender to get a better understanding of the differences between your options.
An increase (and decrease) in home sales
It’s quite possible that we’ll see an uptick (or slow decline) in home sales in relation to political party lines. Predominantly red states may see an increase in sales and those blue states may see a bit of a slowdown.
Transportation plan
Trump has a $550 billion transportation and infrastructure plan that will undoubtedly create new jobs and increase wages. Should his plan come to fruition, we would likely see an increase in demand from homebuyers.
Mortgage rates
We’ve already seen a small increase in mortgage rates since Donald Trump was elected to be our Commander in Chief. We will likely see rates ebb and flow over the next year and beyond.
What does this mean for homebuyers?
As rates rise, this means that you may need to look at lower house values in order to afford a property now. It also means that you will need to pay closer attention to rates so you can lock in when they are at their lowest.
With the uncertainty that any new President brings, it’s hard to know exactly what will happen and when but it benefits everyone to stay abreast of the changing political, financial and real estate landscapes. We’ll be your eyes and ears on any changes you can expect as we move forward through 2017.
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