I try not to get too political, especially on my blog, because I focus on the aspects of buying, improving, and selling a home. The trouble is, there’s a lot riding on the 2016 presidential election. Letting the wrong candidate stroll into the White House could put buying a house even further out of reach for many millennials. The people, like me, who are still getting the hang of the whole “What-the-heck-I’m-an-adult-and-only-Destiny’s-Child-ever -talked-about-this-many-Bills-Bills-Bills” aspect of life.
Look — buying a home is already pretty difficult for most folks. 5-20% for a down payment is no joke, not to mention the upkeep costs. They don’t teach you about the real estate market in school, and once you’re out of school, it seems like more people are trying to trick you into spreading yourself too thin financially than giving you a helping hand. Both candidates have particular stances that would have serious impacts on potential homebuyers. If you don’t want to stick around to read the whole article, at least check out the graphic that summarizes some of the most important points from each candidate.
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Without further ado, here are five ways a Donald Trump presidency could impact the home buying process.
Economists are predicting a full-blown economic meltdown in the event Trump’s elected. This should shock Trump supporters, most of whom admire the golden-haired real estate mogul as the epitome of robust capitalism. But an economic meltdown? Say it isn’t so!
It’s so. Economists predict it would cost the federal government between $400 and $600 billion by going after all illegal immigrants alone. This would also cause the labor force to contract by 11 million workers and reduce the country’s GDP by $1.6 trillion. When the economy is doing poorly, in general, people can’t afford to buy homes — it’s really that simple.
If Trump has had a signature issue during his campaign, it’s illegal immigration. He’s been promising for some time that “President Trump” will build a wall between the U.S. and Mexico. He’s also claimed that Mexico will pay for the wall as well (Mexico’s President, Enrique Peña Nieto, politely declined).
But the unforeseen implications of Trump’s wall, and the police state-like mass deportations he described in the third and final debate could have devastating consequences on the home-building industry, which currently cites unavailability of labor as one of its greatest challenges.
What Trump doesn’t tell you, or what he possibly doesn’t even know, is that undocumented immigrants provide $12 billion in taxes each year. In fact, it’s quite likely the average immigrant worker pays more taxes in a given year than Trump does.
The point is, these are hardworking, productive human beings who contribute to society and wish to continue doing so. And many of them build our homes. President Trump would send millions of these people back to the countries they fled, and possibly split up families while he’s at it.
It’s hardly a secret that this has been one of the most stressful elections in recent memory, if not ever. But if you think the stress is all going to evaporate on November 9th, no matter how things turn out, you haven’t been paying attention. Imagine if the stress we’re feeling about the idea of President Trump becomes stress about the reality of President Trump?
Experts aren’t unanimous in attributing this to either Trump or Clinton, but there already seems to be a sign that election anxiety is having an effect on the housing market. Many folks are delaying their home buying decisions until after the election, they claim, to see how everything shakes out in the end. Industry experts expect President Trump to have a negative effect on the home buying process generally; it seems that homeowners and home buyers are taking note as well.
People with no money don’t buy houses, and neither do anxious people. Buying a home is perhaps the most important investment any of us will ever make. It’s a decision we want to make while on the surest of footing. Trump is anything but predictable, and if he were to run this country the way he’s run his businesses or his campaign, this outpouring of anxiety would be well-justified.
Part of the grand libertarian experiment — which both the Republican and Libertarian parties both champion — is to turn over the maintenance and development of our country’s infrastructure to loosely regulated, privately owned, for-profit corporations. It’s hard to imagine why this ever sounded like a good idea, but that’s never stopped the GOP before.
Trump has made promises about infrastructure spending that are somehow both vague and ludicrous:
No — the simple explanation is that President Trump would play out pretty disastrously for this country’s infrastructure. And there’s good reason to think so. In Omaha, property values sank considerably when the local government put its trust in a privately owned corporation to keep its roads maintained.
When the company in question ran out of money and couldn’t complete its work, it simply ground the roads into gravel, leaving local property owners in the lurch and causing the value of their homes to plummet. We can look forward to more of the same with Trump in the White House.
Trump is a businessman first and a politician second. He knows politics is a good business to be in if you want to make a buck. And so far, everything he’s proposed looks like just another big giveaway to other business owners just like him.
This election is really about one thing: wrestling power from folks who bought it, rather than earned it. For homeownership to become a part of the American Dream once again, we need a government that works for everyone. That means doubling down on amazing programs like the USDA rural development mortgage program, instead of cutting funding.
Donald Trump speaks for a party that regularly cuts veterans’ and unemployment benefits, wants to continue dismantling social programs like Medicare and Social Security, and fights tooth and nail against unions and raising the minimum wage. There are dozens of loans, grants and other programs provided by the federal government to help first-time homebuyers make their dream a reality. But in Trump’s vision for this country, these programs may not exist.
Donald Trump would be an unmitigated disaster for the US housing market and for the economy in general. That’s not an opinion — it’s a fact confirmed by plenty of independent research.
But how well would we fare under President Clinton 2.0? According to historical data, the economy tends to perform better under Democratic Presidents, though the exact reasons are unclear.
Nevertheless, the nation’s eyes have turned toward the 2016 election, and we’re all wondering how the fallout will affect our personal lives. Will our financial realities become more manageable? Will fiscal policy shift in a way that puts homeownership within reach of more working families?
In short, how will a Clinton presidency affect the home-buying process?
Strangely, the party most closely aligned with Christian values is also the one most likely to give tax breaks to billionaires while the working poor fend for themselves. That’s the reality laid bare in Donald Trump’s tax policies and economic proposals: more for the people on top, and less for everybody else.
The Democrats have drawn a sharp contrast between their proposals and the rugged self-determination preached by the GOP. The official Democratic platform for 2016 reads: “Democrats believe that we should provide more federal resources to the people struggling most with unaffordable housing: low-income families, people with disabilities, veterans, and the elderly.”
In practical terms, the Democrats hope to accomplish this goal by, in part, allocating more federal funds for the National Housing Trust Fund. The office helps construct and rehabilitate housing for the poorest American citizens. There’s some worry that federal action on the price of rent could actually discourage homeownership; but at the same time, lower rent means more people could be saving up for a down payment. It’s a bit of a paradox: low rents equal more homeowners — at least potentially.
And although the GOP is more likely to refer to them as “nanny state” proposals, the Democratic Party is also doubling-down on a host of other “social services” that could affect the home-buying process in major ways. Low-income and minority borrowers frequently have trouble getting their financials in order or securing loans. In response, Dems plan to “strengthen” existing law called the Fair Housing Act, which protects against discrimination in the financial industry.
The move would also bolster counseling services for people who need some coaching on good financial fundamentals before thinking seriously about purchasing a home.
As you likely recall, the Great Recession of 2008 was caused in part by the bursting of a housing bubble. But the how and the why of it is still the stuff of policy wonks. Suffice it to say, it finds its root cause in the fundamental differences between Republican and Democratic fiscal policy.
Modern Conservatism says small government is best, and so they’re aiming to gut or eliminate the Consumer Financial Protection Bureau. The Democratic Party sees the Bureau it as an important part of tomorrow’s housing market. If sub-prime mortgages were in part responsible for 2008’s economic meltdown, only one of our two major parties seems committed to making sure they work as intended. That starts with making sure would-be homeowners aren’t being taken advantage of by unscrupulous lenders. The Democrats have committed themselves to accomplishing this, by ensuring banks don’t prey on people by lending to them when they can’t afford it.
One of the most heartbreaking memories of 2008 was the rows of abandoned, foreclosed-upon homes. The Dems hope to make sure that particular eyesore doesn’t happen again. They plan to improve the Neighborhood Stabilization Program and initiatives like it, which seek to develop and rehabilitate vacant properties; including making them available for addressing veteran homelessness. During his term in office, President Obama has cut America’s homeless veteran population by 50 percent. A feat for which he has received very little credit. The 2016 Democratic party platform as written would seek to continue that work.
Clinton and Trump differ greatly on taxes. That’s a problem because taxes play a central role in homeownership.
Hillary Clinton and Donald Trump differ greatly when it comes to taxes. That’s a problem because taxes tend to play a central role when it comes to attaining homeownership in America.
Trump is holding the GOP’s party line when it comes to lowering taxes on the rich ($275,000, per person, in annual tax cuts proposed) and massive corporations (24 percent tax cut proposed). These two proposals would decrease federal revenue by between $9.8 and $12 trillion over the next ten years. Experts in tax policy understand that these plans would be devastating if they came to fruition.
The same fiscal think tanks point out that, under President Hillary Clinton, federal revenue would rise by $1.1 trillion over those same ten years. The burden would fall on very rich Americans instead of the working class. The bottom 95 percent of citizens would see no change in their tax rates.
The end result for the bulk of America — when you compare these two candidates — is that, under either plan, most Americans would see their taxes remain unchanged. Under Trump, rich folks would pay way fewer taxes. Under Clinton, they’d pay slightly more.
It’s important to remember that several important government programs rely on tax revenue to function, including the National Housing Trust Fund. The US Department of Agriculture (USDA) is another one, which helps Americans buy homes in less-developed rural areas for no money down.
Under Trump (or any other Republican president), such programs would be starved for funds and eventually wither and die. Tax cuts for the rich mean austerity for the rest of the country — always. And austerity means fewer people empowered to become homeowners.
The fundamental differences in tax policy cut to the heart of the conflict between modern Republicans and Democrats. One party wants self-sufficiency and a hands-off government. The other wants the country to work together and sees government-sponsored social programs as the solution.
Owning a home shouldn’t be a pipe-dream, and it shouldn’t be unattainable for a majority of Americans. If you agree and hope to own your own house someday, the rational choice on November 8th couldn’t be clearer.