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As the 2024 election approaches, the real estate market finds itself at a crossroads. Both Kamala Harris and Donald Trump have laid out contrasting proposals to stimulate the housing market, but both could result in increased home prices. Below is a mock debate outlining their key policies and the possible outcomes for the U.S. housing market.
Kamala Harris: Affordable Housing & Assistance for First-Time Homebuyers
Kamala Harris’s Proposal:
Down Payment Assistance: Harris aims to provide $25,000 in down payment assistance for first-time homebuyers. This is part of a broader effort to make homeownership more accessible, particularly for lower-income Americans.
New Home Construction: A commitment to build 3 million new homes over four years to address the housing supply shortage. This includes expanding affordable housing tax credits to support both builders and renters.
Focus on Affordability: Harris’s plan shifts from demand-side interventions like tax credits towards increasing housing supply through government incentives and funding.
Potential Outcome: Harris’s policies are designed to make it easier for first-time buyers to enter the market and alleviate the supply shortage. However, real estate professionals express concerns that these policies might increase demand without significantly improving supply in the short term. The influx of new buyers could drive prices higher, especially in markets with already limited inventory.
Pro:
Increases homeownership access for first-time buyers.
Long-term supply improvements could stabilize housing prices.
Con:
In the short term, demand-side incentives like down payment assistance could exacerbate price inflation in high-demand areas.
Donald Trump: Deregulation and Market Freedom
Donald Trump’s Proposal:
Deregulation: Trump plans to reduce building and zoning regulations to streamline the construction process, making it cheaper and faster to develop new housing units. By cutting red tape, he hopes to stimulate the private sector to build more homes, which could increase housing supply and lower prices in the long run.
Privatization of Fannie Mae and Freddie Mac: Trump supports privatizing government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac. This could lead to more competition in the mortgage industry but might also introduce higher mortgage rates for some borrowers.
Tax Cuts and Business Incentives: Trump is likely to push for tax incentives aimed at stimulating economic growth and raising disposable income, which in turn would boost homebuying.
Potential Outcome: Trump’s approach focuses on the supply side by removing regulatory barriers and promoting private investment in real estate. However, the reduction in regulations could lead to a short-term price surge as demand spikes in response to easier development processes. Additionally, privatizing Fannie Mae and Freddie Mac might create uncertainty in mortgage markets, potentially driving up borrowing costs.
Pro:
Deregulation could increase the housing supply and lower development costs.
Economic growth through tax cuts could boost purchasing power for buyers.
Con:
Reduced regulations could lead to short-term price increases due to an initial imbalance in supply and demand.
Uncertainty in mortgage markets could hurt affordability for some buyers.
The Bottom Line: Will Prices Rise Regardless?
While both candidates aim to tackle the housing crisis, their strategies could unintentionally lead to higher home prices. Harris’s down payment assistance might flood the market with more buyers, pushing prices higher if new homes can’t be built quickly enough. On the other hand, Trump’s deregulation could lead to a boom in construction but also cause demand to spike before supply catches up.
Harris’s Vision focuses more on immediate help for first-time buyers but risks creating more competition in an already tight market. Trump’s Plan aims to make it easier to build homes, but deregulation could increase demand faster than new supply can meet it, leading to short-term price hikes.
In the end, both approaches have merit, but the real challenge will be balancing demand with supply to prevent further price increases.
Who Holds the Key to Housing Affordability? In this debate, the ultimate impact on real estate prices depends on how quickly supply can be increased to meet the inevitable demand surges from both candidates’ policies.
Bottom Line: Why Now is the Right Time to Buy Real Estate
With the 2024 election on the horizon, both Trump and Harris have laid out real estate plans that, while different, are likely to lead to real estate appreciation regardless of who wins. By purchasing now, buyers can avoid the intense competition that may come later as more policies incentivize homebuying. Getting in early allows you to benefit from today’s lower price points and gives you the ability to negotiate favorable terms.
In addition, if you’re considering new construction, builders are offering attractive incentives such as interest rate buy-downs, paid closing costs, and upgrades. These perks make now an even better time to buy before any major policy changes take effect and potentially drive up demand.
Whether you’re a first-time buyer or an experienced investor, acting now positions you to benefit from both rising home values and the favorable conditions available today!
