Nov
15

Housing Hurt

worker_1President-elect Trump’s and Congress’ preliminary policy ideas look possibly problematic for housing. On one hand, dismantling Dodd-Frank should loosen lending standards and tax cuts will put more money in our pockets. However, higher interest rates and a shrinking supply of (illegal) workers will increase construction costs, as will increased infrastructure spending by raising worker wages due to rising construction worker demand. Lastly, if Fannie/Freddie are dismantled, borrowing costs will rise.

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  1. Tom Caron says:

    So for eight plus years we have enjoyed a historically low interest rate environment. Despite low rates mortgage lending is down from its “normal market” highs. We have become so use to the current market that many of us feel that anything else would put us in the tank. There was a time many years ago where 30 year mortgage rates were 8%. When they fell to 6% everyone thought that it was wonderful and responded.

    We will adapt to the higher “normal” rates but not without some initial stagnation and fear.

    We have seen this before.

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