There's no doubt that elections bring a bit of chaos to the American people. Depending on which side of the aisle you sit on, the potential for a change in power might bring excitement or fear. But regardless of where your political beliefs lay, we can't argue the importance of America's election as our health, finances, safety, and overall well-being can be impacted by those governing our nation.
As real estate agents, the state of the housing market significantly impacts our livelihoods and that of our clients. While we can only speculate and wait to see how the President-Elect will tackle the housing market, we can look to history to explain what to expect from the coming months with a new Commander in Chief.
What History Tells Us
No matter the party elected to the White House, the President has the power to shape the country's housing market and the overall economy.
Change breeds uncertainty, which is why, historically, new home sales record a drop in median sale activity of 15% from October to November in election years. However, the December after an election typically makes a full recovery from the sales lost before the election.
There has been no clear-cut change in housing prices following an election, asserting that consumers should not expect any drastic changes heading into 2021.
The Current State of the Housing Market
The United States housing climate has remained steady as of late. A competitive buyer field matched with limited inventory, leading to homes spending about an average of 13 days on the market.
Recent activity shows no signs of slowing down, meaning continued price growth and quick sales. A lack of inventory puts homebuyers in an unfavorable situation.
According to President-Elect Biden's camp, this is set to change.
President-Elect Biden's Plan of Action
Along with his suitcase, Joe Biden will be taking a plethora of ideas with him to the White House. Included, is a shift in the housing market to assist low- and middle-class Americans.
Chief Economist of Realtor.com, Danielle Hale, says, "Biden has a really ambitious agenda that will try to create opportunities for more low- and middle-income Americans to become homeowners or afford rental housing."
Biden's plan for the housing market consists of a $640 million budget. This overhaul includes the first-time homebuyer down a payment tax credit of up to $15,000, helping more Americans set on the path to homeownership. There is also talks of a down payment assistance program to benefit teachers, first responders, and other public and national service workers.
Biden intends to fund Section 8 vouchers for renters fully, so low-income Americans can qualify for this program to receive assistance. Along those lines, low-income renters will receive a tax credit designed, so they only pay up to 30% of their income on housing and utilities.
A few other notes include an additional $100 billion of funding toward constructing and upgrading affordable housing and provide emergency funding to shelters to ease homelessness.
Biden's intentions are clear, with the hopes of creating equal housing opportunities for all Americans.
What a Biden victory means for the mortgage industry.