The Great Divide: Trump Vs. Harris Housing Policies, Taxes, And The Fight For Affordable Living

The 2024 presidential election will have a major influence on real estate, especially regarding taxes, home prices, and affordable housing. Trump and Harris, the leading candidates, have very different economic plans that could shape the future of residential real estate, from housing inventory forecasts to affordability challenges. Analyzing current market conditions and predicting future housing supply dynamics, the housing inventory forecast highlights the need for increased housing inventory to meet demand, while addressing factors like mortgage rates and new home construction that affect the supply of homes available for sale. Trump’s focus is on maintaining tax incentives and deregulation to stimulate investment, while Harris aims to expand government assistance, including down payment and closing cost assistance, to help prospective homebuyers. For anyone involved in real estate, understanding how each candidate’s plans may affect the housing market is essential.

Real estate professionals, homeowners, and would-be buyers alike should be aware of what’s at stake. The policies proposed by Trump and Harris could have a significant impact on everything from property taxes to housing demand. Members of Elite100, representing some of the nation’s top real estate agents, are staying informed about these potential changes to advise clients effectively, especially as affordability challenges and home price growth continue across many markets.

At Elite100, we provide our members with access to resources and networking opportunities to help them stay ahead in the housing market. Our top agents leverage insights to help clients navigate potential shifts in economic policy, whether it involves monthly payments, loan terms, or a significant drop in housing supply.

Trump’s Approach: Tax Cuts, Deregulation, And Real Estate Investments

Trump’s economic plans have historically leaned toward tax cuts and deregulation, with a particular emphasis on benefiting investors and businesses. During his previous term, the 2017 Tax Cuts and Jobs Act (TCJA) lowered corporate tax rates, provided tax incentives for real estate investors, and aimed to stimulate new construction by making housing policies more favorable for builders. For real estate agents and hopeful buyers, this approach could mean increased demand and more housing units, although this might not automatically translate into affordability for first-time homebuyers or lower mortgage rates.

However, Trump’s policies could be less beneficial for individual homeowners, particularly those in high-tax states where property taxes are substantial. The cap on state and local tax (SALT) deductions, part of the TCJA, limited homeowners’ ability to deduct property taxes beyond $10,000. This SALT cap, if maintained, would put downward pressure on the financial situation of existing homeowners in high-tax areas, potentially affecting housing demand as well as house prices. Data from the Mortgage Bankers Association illustrates how fluctuations in mortgage rates impact market behavior, particularly during periods of economic change.

Trump also emphasizes deregulation, aimed at increasing inventory and supporting builder sentiment, especially in areas facing low inventory. By removing red tape around urban development and zoning laws, Trump seeks to increase the availability of housing. However, while this could create more housing supply, it may not have an immediate impact on affordability. For real estate professionals, this may mean more listings and properties on the market, but existing home sales may not see significant upward pressure due to affordability constraints.

Harris’ Vision: Affordable Housing, Tax Reform, And Middle-Class Support

Harris’s economic plan centers around expanding affordable housing and supporting middle- and low-income families. Her approach includes rolling back parts of the TCJA and increasing taxes on high earners and large corporations, with a portion of that revenue potentially directed toward housing programs and down payment assistance. Harris has proposed housing policies that aim to make homeownership more accessible to first-time homebuyers, a strategy that may help with housing demand and home sales, particularly among low-income buyers.

One of Harris’s primary goals is to introduce payment assistance programs and boost mortgage lenders’ ability to support first-time homebuyers with favorable loan terms. Her proposed credits would enable younger and low-income Americans to manage closing costs and down payments, two major barriers to entry for many buyers. If these policies are enacted, they could result in more buyers entering the market and a balanced market dynamic, easing the affordability challenges that have prevented many buyers from securing a median-priced home.

Harris is also a strong advocate for tenant rights and rental assistance. Her policies could add restrictions on rent increases and offer financial assistance to renters facing affordability challenges. For real estate agents involved in property management, these changes may mean adapting to a new set of tenant regulations. More renters may opt for home purchase options if Harris’s policies lead to a favorable drop in mortgage rates or increased home equity options. Consulting a real estate agent can provide valuable insights into local housing market dynamics, especially regarding current mortgage rates and housing inventory.

Housing Market Trends And Affordability In 2024

Rising inflation has impacted essential costs like groceries, mortgage rates, and monthly payments, limiting disposable income available for home purchases. Trump’s economic approach relies on market-driven solutions, hoping that tax cuts for businesses will spur economic growth, indirectly easing costs for individual consumers. However, this approach may not directly reduce mortgage rates or increase affordability for existing homeowners or prospective homebuyers, who remain challenged by high mortgage rates and rising housing prices.

Harris, however, supports direct intervention to tackle affordability issues and provide immediate relief to middle- and low-income families. By funding social programs and subsidies for essentials, Harris aims to make more buyers financially secure, potentially boosting home sales if affordability programs are enacted. Housing market forecasts suggest that anticipated changes in mortgage rates could impact home affordability, with lower rates potentially increasing demand and driving up home prices. Real estate professionals may see housing demand increase as more buyers gain the financial stability needed to enter the market, particularly if closing cost assistance and other buyer-friendly measures are passed.

Both candidates recognize the need for affordable housing, but their methods differ widely. Real estate agents should anticipate policy changes that might impact buyer affordability, home sales, and rental policies under each candidate. Preparing clients for either approach will allow agents to support buyers and sellers, whether the focus is on lowering monthly payments or leveraging down payment assistance.

How Deregulation Could Influence Housing Supply

Deregulation plays a key role in shaping housing supply, especially in urban development areas facing low inventory and affordability issues. Trump’s policies encourage deregulation to speed up new construction projects and boost housing units, addressing the housing recession in some areas. Deregulation could result in more homes available on the market, although it may not automatically bring housing prices down.

Increased housing supply also tends to boost builder sentiment, particularly for single-family homes in high-demand areas. However, while removing regulations can stimulate new construction, it could also have unintended effects, such as lowering quality standards. Buyers may find more homes on the market, but real estate professionals should guide clients toward quality investments, considering factors like price growth and market stability.

Deregulation can encourage more sellers to list properties, yet real estate agents must understand the trade-offs of these policies. As housing inventory rises, affordability may not keep pace, creating an environment where new construction competes with existing homes, but without significant price decreases for prospective buyers. Real estate professionals should help clients evaluate both new and existing properties carefully.

The Impact Of SALT Cap And Local Tax Policies On Homebuyers

The SALT cap, introduced under the TCJA, has affected homeowners in high-tax states, especially those buying higher-value properties. Trump’s tax policy may keep the SALT deduction cap in place, impacting housing inventory in high-tax regions like California and New York, as many buyers hesitate to purchase homes with limited tax deductions. Real estate agents working with high-end properties should discuss how the SALT cap may impact overall costs for homebuyers.

The SALT cap lowers the financial benefit of homeownership, particularly for those paying high property taxes. Without significant changes to SALT, many buyers may face higher effective tax rates, impacting their overall home purchase decision. Real estate professionals working in states with high property taxes should prepare to discuss how these tax implications could affect prospective buyers.

On the other hand, Harris’s rollback of the SALT cap may increase affordability in high-tax states, spurring interest in the residential real estate market. For agents, this could lead to increased demand, particularly in markets that have been struggling due to affordability issues. A SALT cap adjustment could lead to more buyers entering the market, driving home sales and expanding inventory options.

Trump Vs. Harris: Differing Views On Corporate Real Estate Investment

Corporate tax policies have significant effects on real estate investors and commercial property markets. Trump’s pro-business stance, which includes tax incentives for corporate investments, tends to attract businesses looking to expand or invest in property. This may support growth in commercial real estate markets, boosting the value of investment properties and impacting builder sentiment positively.

In contrast, Harris’s proposed tax reforms could affect corporate investments differently. An increase in corporate taxes may discourage businesses from expanding into new properties or buying investment properties, leading to further declines in commercial real estate markets. For agents in commercial sectors, anticipating tax reforms will be key to understanding market demand and advising real estate investors accordingly.

For clients seeking stability, Trump’s approach may be favorable for corporate real estate investments. However, Harris’s tax plan may benefit lower-income housing through redirected tax revenue toward affordable housing and home purchase assistance programs, which could ultimately increase demand for housing units and balanced market conditions.

Interest Rate Implications Under Each Candidate’s Policies

Interest rates directly affect mortgage payments, monthly payments, and overall affordability in the housing market. Trump’s approach to keeping the Federal Reserve independent could lead to interest rate fluctuations based on market conditions rather than direct intervention. Real estate agents may find it challenging to advise clients on stable mortgage rates under this policy, as rates might vary.

Harris, on the other hand, has hinted at policies that may exert upward pressure on interest rates, especially for higher-income earners. However, she may also consider programs to lower mortgage rates for first-time buyers or those in specific income brackets. Agents might see more homeowners choosing to refinance or cash out refinance options if Harris successfully reduces rates for targeted groups.

Real estate professionals should understand how both candidates’ policies could influence average rates, loan terms, and mortgage rate options. This insight can help prospective buyers and sellers make decisions based on potential changes to monthly payments and interest rates.

How High Mortgage Rates Impact First-Time Homebuyers

High mortgage rates are a significant barrier to homeownership, particularly for first-time buyers who lack established home equity. Trump’s policies may keep mortgage rates aligned with market trends, which can lead to higher costs for new buyers if inflation persists. For first-time buyers, these high mortgage rates could mean reduced buying power, limiting options in high-demand areas.

Harris, however, has discussed providing direct assistance to first-time homebuyers, potentially helping to cover down payments or providing payment assistance to lower monthly costs. If she implements policies that result in a mortgage rate drop for first-time buyers, many markets could see an influx of first-time homebuyers and increased demand in affordable neighborhoods.

For real estate agents, understanding these dynamics is essential in advising first-time buyers. Whether navigating high mortgage rates or taking advantage of potential assistance programs, agents should be prepared to provide insights that address affordability and help clients save money on their monthly payment.

Housing Inventory and Market Conditions in 2024

Inventory levels directly impact housing prices, the availability of existing homes, and overall buyer demand. Trump’s policies may create upward pressure on new construction, leading to much-needed inventory in markets with low supply. However, low inventory could remain an issue in urban areas where construction is slow or costly, leading to high competition among buyers and price increases.

Harris may address low inventory through affordable housing initiatives, focusing on funding for urban development and incentives for builders. If her policies successfully increase inventory in specific markets, it may lead to a more balanced market, with lower competition and more affordable options for buyers.

Real estate agents should be aware of housing market predictions for 2024 and 2025, which anticipate trends such as climbing home prices and high mortgage rates. By understanding these predictions and inventory forecasts, agents can help clients decide on the right timing for their home purchase or sale.

Trump’s Tax Plan And Its Effects On Homeownership

The Trump administration’s tax plan, implemented in 2017, brought significant changes to homeownership in the United States. One of the most notable changes was the doubling of the standard deduction, which led to fewer taxpayers itemizing their deductions. This shift had a considerable impact on homeowners, who traditionally rely on itemizing to reduce their taxable income.

As a result, many homeowners experienced an increase in their taxable income, which in turn affected their ability to afford homes. Additionally, the plan introduced a cap on state and local tax (SALT) deductions, limiting the amount of mortgage interest and property taxes that could be deducted. This change particularly affected homeowners in high-tax states, making it more expensive to own homes in these areas and potentially leading to a decrease in housing prices.

Despite these challenges, the housing market has shown resilience. According to the National Association of Realtors (NAR), existing home sales have continued to rise, albeit at a slower pace. However, the long-term effects of the tax plan, particularly the changes to the mortgage interest deduction, could lead to a decrease in home prices over time. Real estate professionals should stay informed about these trends to provide accurate advice to their clients.

Strategies For Addressing Affordability

Addressing affordability in the housing market requires a comprehensive approach that includes both short-term and long-term strategies. In the short term, policymakers can implement measures to increase the supply of affordable housing. This could involve providing incentives for developers to build affordable units or implementing rent control policies to stabilize rental prices.

Long-term strategies should focus on addressing the root causes of unaffordability, such as rising housing costs and stagnant wages. Policymakers can work on zoning reforms and invest in affordable housing programs to increase the overall housing supply. Additionally, increasing access to affordable financing options, such as down payment assistance programs and mortgage insurance, can help more people achieve homeownership.

Another crucial strategy is to boost the supply of affordable rental housing. This can be achieved through tax credits, zoning incentives, and subsidies for low-income renters. Preserving existing affordable rental housing is equally important, and policies like rent control can play a significant role in this effort. By implementing these strategies, policymakers can help create a more balanced and accessible housing market.

Economic Trends And Housing Market Fluctuations

The housing market is closely intertwined with the broader economy, and fluctuations in economic trends can significantly impact housing conditions. One of the most influential economic factors is interest rates. When interest rates are low, borrowing costs decrease, making it cheaper for people to buy or refinance homes. This typically leads to an increase in housing demand and home prices.

Employment rates also play a critical role in the housing market. High employment rates generally lead to greater financial stability, enabling more people to buy or rent homes, which boosts housing demand and prices. Conversely, low employment rates can reduce housing demand and lead to price declines.

Demographic trends, such as population growth and migration patterns, also affect the housing market. For instance, an increase in population growth can drive up housing demand, while a decrease can have the opposite effect. Real estate professionals should monitor these economic and demographic trends to provide informed advice to their clients and anticipate market fluctuations.

The ‘Silver Tsunami’ And Its Impact

The “silver tsunami” refers to the anticipated surge in the number of older adults in the United States, which is expected to have a profound impact on the housing market. As the baby boomer generation ages, there will be a growing demand for age-restricted housing and senior living communities, as many older adults look to downsize or age in place.

This demographic shift could also lead to an increase in the number of homes being sold by older adults, potentially boosting the housing supply. This influx of homes on the market could benefit first-time homebuyers, offering more affordable options and potentially lowering home prices.

However, the silver tsunami also presents challenges, particularly in terms of affordability. Older adults who choose to age in place may require more expensive housing options, such as assisted living or memory care, which could drive up housing costs. Additionally, the increase in older adults looking to rent rather than buy could heighten demand for affordable rental housing. Policymakers and real estate professionals must be prepared to address these evolving needs to ensure a balanced and accessible housing market.

Conclusion: The Future Of Affordable Living In The US

The future of affordable living in the US hinges on several key trends and strategic interventions. The demand for affordable housing is on the rise, driven by factors such as increasing housing costs, stagnant wages, and demographic shifts. To meet this demand, policymakers must implement a variety of strategies, including increasing the supply of affordable housing, providing incentives for developers, and enacting rent control policies.

Access to affordable financing options, such as down payment assistance programs and mortgage insurance, is also crucial in making homeownership attainable for more Americans. As the silver tsunami approaches, the need for affordable rental housing will become even more pressing. Policymakers can address this by encouraging the development of affordable rental units through tax credits and zoning incentives.

Ultimately, the future of affordable living in the US will depend on a combination of economic trends, demographic changes, and policy decisions. By understanding these factors and implementing effective strategies, policymakers and real estate professionals can work together to ensure that affordable housing is available to all Americans, fostering a more inclusive and stable housing market.

Why Choose Elite100 For Your Real Estate Needs?

Elite100 agents are some of the most knowledgeable real estate professionals nationwide, equipped to guide clients through changes in the market brought on by the 2024 election. Whether it’s advising on tax benefits, navigating new regulations, or helping clients take advantage of potential homeownership incentives, Elite100 agents bring expertise and a trusted network. Our members have exclusive access to resources, from logo visibility to nationwide roster announcements, enhancing their credibility and reach.

Elite100’s membership team also offers unparalleled support, making onboarding easy and coordinating benefits for all agents. Clients can trust Elite100 agents to provide the insights they need to understand the evolving housing market. For expert guidance in these changing times, reach out through our contact form at https://elite100agents.com/contact/ or call us at (800) 681-9489.