The Future of Housing Policy Under President Trump
The inauguration of President Trump is still two months away, but the president-elect is busy building his cabinet and outlining the broader details of his plans for policy. From the Federal Reserve to Dodd-Frank, here are some of the changes proposed by the president-elect that will impact the housing market and the mortgage industry.
On the campaign trail, Trump claimed that “if I win, Yellen’s days at the Fed will be numbered.” However, economist and senior fellow at the Atlas Network who advises Trump, Judy Shelton, stated, “he’s not urging her to resign at all.” While it is unlikely that Trump will elect Yellen for another term, after her current term ends in February 2018, there are no immediate plans for dismissal. As far as the December rate hike is concerned, some economists have lowered their probability predictions and others are claiming it is completely off the table.
On his new website GreatAgain.gov, Trump outlines his plans to replace the Dodd-Frank Act with new policies. The statement reads “Economic growth remains below 2% […] the Dodd-Frank economy does not work for working people. […] The Financial Services Policy Implementation team will be working to dismantle the Dodd-Frank Act and replace it with new policies to encourage economic growth and job creation.” Conversely, Senator Elizabeth Warren (Democrat, Massachusetts) vehemently opposes such changes in policy.
Mortgage rates have been on the rise since the election, hitting 4% for the first time since January. With home prices on the rise due to limited availability, higher mortgage rates will only put further strain on the housing market. Mortgage Bankers Association economists predict that rates will “trend higher than we had previously forecast, which will more quickly decrease refis.” These rate changes may be reactionary, and depend more on long-term policy and economic changes.
While housing policy was absent throughout the campaign and during the debates, changes are on the horizon. The effects of housing policy changes will surface as Trump transitions into the White House.
Sources: CNBC, Wall Street Journal, Greatagain.gov, HousingWire, HousingWire, Mortgage New Daily