The US presidential election is fast approaching, and with the housing market struggling with affordability, some experts are speculating about the potential impact of Donald Trump winning.
Marty Harlee, president and CEO of First Trust Financial, said Trump could push the Federal Reserve to lower their interest rates if he wins a second presidential term. This could then lead to lower mortgage rates and a boom in the number of home sales.
"If former President Donald Trump should win the upcoming election, we would see another massive refinance boom along with a record number of home sales," Harlee said. "Lowering rates would move every other industry upward as well."
Harlee's forecast was echoed by Mike Wall, a full-time realtor, real estate investor, and founder of EZ Sell Homebuyers.
"While the president does not directly set interest rates, the administration's fiscal policy can influence inflation and economic growth, thereby indirectly affecting the Federal Reserve's decisions," Wall told GoBankingRates.
"Trump's previous term saw pressure on the Federal Reserve to keep interest rates low to support economic growth. A second term could continue to see a preference for lower interest rates, making mortgages more affordable and potentially boosting the housing market," he continued.
The Housing Market Could Also Suffer
Having said that, Harlee noted that the real estate market could also suffer if Trump is reelected, noting that home prices could increase and the inventory could decline if mortgage rates decline.
Dennis Shrisikov, a professor of finance, economics, and accounting at the City University of New York, said Trump could impose more deregulation and tax cuts if he is reelected. While these could help increase demand for homes, he said it could also trigger inflation, which could make mortgages more expensive.
"Trump's tenure was marked by significant market volatility, partly due to his unconventional approach to policy and communication. This unpredictability can create uncertainty in the housing market, causing potential buyers and investors to hesitate," Shrisikov said.
As of the week ending July 11, the contract rate on a 30-year fixed mortgage was 6.89% while the rate for the 15-year mortgage was 6.17%, per Freddie Mac. The median home sale price as of last month was $397,250, according to Redfin.