What Does Trump’s Economy Mean for the Housing Market?

On The Market

BiggerPockets

News, Investing, Business, Education

4.8 • 820 Ratings

🗓️ 25 November 2024

⏱️ 35 minutes

🔗️ Recording | iTunes | RSS

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Summary

Did economic sentiment decide the 2024 presidential election? For many Americans, the economy was top of mind when deciding who to vote for in this past election. With inflationary worries, high home prices and mortgage rates, and general unaffordability, many Americans chose President-Elect Trump to turn the economy around. So, what does the housing market look like under Trump’s economy? And how will proposed changes (like tariffs) influence home prices? Matthew Walsh from Moody’s Analytics is on to give us some context about consumer sentiment, future home prices and mortgage rates, and what tariffs mean for the average American. Matthew brings up a good point: Even with inflation steadily declining, most Americans are still experiencing sticker shock due to our constant comparison of pre-pandemic pricing. Even with the economy doing well, it’s easy to understand why Americans feel in a worse spot than five years ago. So, with inflation cooling, will housing affordability catch up? A big part of affordability is mortgage rates, and with the Fed cutting rates, are we on the cusp of a return to (somewhat) normalcy? Matthew shares the shocking statistic on what mortgage rates would have to be for us to reach 2019 levels of affordability. Finally, we’re talking about tariffs and how higher prices for homebuilding could translate to your final home price. In This Episode We Cover Consumer sentiment and how American finances influenced the 2024 presidential election How low mortgage rates would have to go for us to get back to 2019 affordability levels What Trump’s tariff proposal means for homebuilders and home prices Moody’s 2025 and 2026 home price appreciation forecast Why mortgage rates aren’t falling even after the Fed lowered their federal funds rate And So Much More! Links from the Show Join the Future of Real Estate Investing with Fundrise Join BiggerPockets for FREE Find Investor-Friendly Lenders Dave's BiggerPockets Profile Opinion: There Could Be Financial Risks Under a Trump Presidency—Here’s How to Hedge Against Them Moody’s Analytics Grab Dave’s New Book, “Start with Strategy” Jump to topic: (00:00) Intro (01:18) Consumers Are Anxious (04:02) The Inflation "Disconnect" (11:50) Will Homes Ever Be Affordable Again? (14:40) Home Prices Could Stagnate (22:28) The Tariff Effect (29:14) Still Undersupplied in 2025? Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-272 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	forecasting interest rates is an extremely difficult task.
0:04.0	That's why I'm asking you to do it, so I don't have to do it.
0:07.0	Yeah, I'll put a marker in the sand for me.
0:09.0	America has elected its next president.
0:13.0	Donald Trump won the 2024 presidential election.
0:17.0	And when you dig into some of the data about what happened on election day, exit
0:22.5	polling tells us that the economy was at the top of many voters' minds. So specifically, I'm
0:28.9	curious, how did inflation and the relative unaffordability of the housing market shape the election?
0:36.0	And what does the new political landscape mean for the housing market?
0:44.6	Hey friends, it's Dave and I am excited to chat about all this stuff and learn about what might
0:51.4	happen in the housing market in the wake of the election with my guest
0:56.0	today, Matt Walsh from Moody's analytics. Matt is one of Moody's resident experts on the
1:02.0	housing economy, and he's here to talk to us about how the economy influenced this election
1:07.8	and how some of Trump's proposed policies may shape the future of the
1:14.5	housing market next year and actually well into the future. So let's dive in.
1:23.7	Matt Walsh, welcome to On the Market. Thanks for being here. Yeah, thanks so much for having me, Dave. It's great to be here.
1:29.0	This is an exciting time for economists, I feel like. There's a lot of new information coming out every single day.
1:36.6	Most recently, we, of course, had the election. And I think in many ways, it seems like this was sort of a referendum on the economy. Do you think that's mostly driving a lot of decision making in the recent election?
1:50.0	Yeah, I think that's a great point. I think it's put well, too. You know, it touches on a pretty interesting question that us economists have been dealing with over the past year, year and a half. You know, us economists look at the data and we see that the economy is performing really well.
2:04.6	You take your pick of the indicator and it shows that we're in good shape.
2:08.6	GDP is running above the long-term estimates of potential.
2:12.6	The labor market continues to turn out jobs.
	...

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