Trump President-Elect and Real Estate
President-Elect Trump is a billionaire, his fortunate coming from real estate investments. How will this affect the family making the median household income? Regulations and tax reform in regards to real estate is expected. The low housing inventory in most markets is increasing sale prices and rental prices. The builders have increasingly moved to higher-end building, moving away from Workforce housing, (median household income vs cost) In Billings we have a median household income of approx $55,000, and with current interest rates that will buy a home valued at approx. $225,000 depending on the taxes, insurance and your credit score. Currently the Billings MLS offers 401 listings priced up to $225,000.
Interest rates are expected to move slightly higher, but the Federal Reserve has been saying that for months. The officials at National Association of Realtors (NAR) feel this is likely to happen in 2017. The TRID regulations added this year has cost the Banks approx $255 more per transaction, who then pass this along to the buyer. Easing of the regulations is expected, at least for local community banks around the country.
Student Debt continues to dampen the ability of First time home buyers. While this group historically made up 40% of all home buyers, 2012 showed the percentage at just 35%. Many states are looking at investments in community colleges and trade schools to help with the high demand for jobs in electrical, plumbing, and mechanical.
The shortage of housing supply is causing increased prices throughout the country. Sellers are staying in their homes an estimated 10 years, up from a historic 6.5 years. Sellers do not have the equity appreciation (the great recession) and have lower credit scores because of 2008-2012 job losses. Ideas to help ease the shortage have ranged from a 15 % foreign buyer tax, allowing investors to unload single family homes tax free, encouraging builders in townhome/condo projects. In addition, while housing prices have gone up the median household income , adjusted for inflation, has actually gone down since 2006, from $57,423 to a $56,516.
Housing, student debt, real estate,
Information taken from NAR resources, and written by Trina White, Billings & Beyond LLC