How Will Joe Biden’s Presidency Affect the Real Estate Market?
Undoubtedly, 2020 has been quite a unique year. As we get through these final months, it is definite that the 2020 presidential election’s outcome is likely to shake things up even more. Now that Joe Biden will be the president, you might probably be asking yourself, “How will his presidency impact real estate?”
Out of the proposals that he has made for the real estate industry, several of the suggestions might favor new investors who want to get into real estate, and other factors and trends that have been under way through parts of the Obama and Trump years are likely to continue. Let’s take a look at how Biden hopes to shape the real estate industry in the United States:
Mortgage and Rent Forgiveness
Among Joe Biden’s proposals is the notion of mortgage and rent forgiveness for those behind due to the impact of the Covid-19 Pandemic. He has insisted that it should be forgiveness and “not paid later,” which would greatly benefit people in the lower-income strata. As much as his proposal could offer a potential helping hand for struggling renters and homeowners, it could hurt landlords who rely on rental income to help fund their cost of living as well as others working in the leasing industry.
The implementation of these policies could have an impact on the available resale housing inventory in the coming months; for example, allowing homeowners to stay in their home rather than be forced to sell.
Aid for Potential Homebuyers
Another Biden proposal is to assist first-time homebuyers by introducing up to $15,000 in tax credit to help facilitate more homeownership for the millions of Americans . Additionally, he is advocating for downpayment support for service workers and a number of another initiatives to help drive housing supply.
Based on an investor’s position, some of these policies might enhance access to property ownership. The suggested tax deductions COVID-19 may bring, together with down payment aid, could boost some ambitious investor’s need. Notwithstanding, heightening homeownership’s affordability on a large scale may make it challenging for some real estate investors to keep their rental houses full. Nonetheless, occupancy proportions for low-income rates might increase as a result of proposed changes to Section 8 vouchers.
Mortgage Interest Rates
Even with Joe Biden as the president, mortgage industry experts believe that the interest rates will continue to linger near historic lows for the next several years as has been the case throughout the Trump presidency and years of the Obama Administration as well. The economy is likely to remain fragile, keeping rates low, which will favor buyers and drive activity. Check today’s rates now.
Since the housing inventory is in short supply at this time, as it has also been in most places around the country for years now, sellers will have to increase the supply to meet buyers’ demands. When the inventory is low, even the affordability rate becomes low due to the few options that buyers can choose from, which means increased home prices.
Now that Joe Biden will be the president, he plans to use Fannie and Freddie to help close the wealth gap, cap individual’s payments on both occupied and rental housing, close the homeownership gap, and more importantly, support the construction of around 1.5 to 2 million affordable housing units. This would mean that the inventory will rise to a level where there is a balance between buyers’ demand and the homes available for sale.
How a Biden Presidency Will Impact Real Estate
As a president, Joe Biden looks forward to rebuilding the middle class and making sure that each person has an opportunity to come along. He believes that the middle class should have the capacity to possess their own homes and live in a secure community. His mission is to ensure that every American can access housing that is affordable, safe and healthy, stable, energy-efficient, located near good schools, and with a reasonable commute to their jobs.
It will be interesting to see how it all unfolds but as of this moment, it remains a great time to buy with low interest rates and a great time to sell with low competitive inventory – if you are interested in either, connect with our network of top local real estate agents now!