Neuswanger: How the election might impact the housing market
Since it’s a presidential election year, let’s take a look at how politics might impact home prices.
To build or commit to buying a home is a big step, and consumers need to feel confident that good times lie ahead to make the jump to taking on six digits of new debt for the next 30 years.
Consumer confidence has always been a key factor in the rise and fall of the housing market, and as anyone who has ever bought a house will attest, houses need stuff. From carpet and paint to shower curtains and new placemats for the dining room, billions are spent by new homeowners who otherwise would make do with what they already have, and that impacts nearly every segment of the economy.
And as one’s level of happiness with the current president of the United States probably impacts one’s level of consumer confidence in the future of the economy, it is now proven that the fortunes of real estate ride on the coattails of the president’s popularity, at least during the Trump years.
Support Local Journalism
A recent study from analysts at the financial services firm BTIG looked at the number of building permits issued in counties where Trump carried that fateful day by winning more than 50% of the vote versus those counties that Hilary Clinton carried 50% plus. The study also compared job growth and wage growth between the two groups.
Where Trump won, building permits increased by 11%. In counties where the voters resoundingly chose Clinton, new building permits dropped by 9%. This, despite job growth and wages being close to equal between the two groups.
In Trump counties, job growth averaged 5.7%. In Clinton counties, job growth averaged 4.7%. This spread might be related to the peripheral impact of economic activity generated by more home construction and sales. However, the jobs in Clinton counties seemed to pay better with wages increasing 10.2%, which beat Trump counties with 9.5% wage increases.
This might mean that if you want to invest in housing companies this year, it might be wise to research which companies have market share in Trump versus Clinton counties. And depending on the outcome of the next election, you might want to move your portfolio around some.
And, as Hilary Clinton did actually win the popular vote by nearly 3 million votes, it is safe to say that the above statistics likely point to a great deal of anxiety amongst her base and those consumers have likely reigned in purchases of other major consumer items.
Chris Neuswanger is a mortgage loan originator at Macro Financial Group in Avon and may be reached at email@example.com or 970-748-0342. His web site is www.mtnmortgageguy.com.
Support Local Journalism
Readers around Vail, Beaver Creek and Eagle Valley make the Vail Daily’s work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.
Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.
Each donation will be used exclusively for the development and creation of increased news coverage.
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.
User Legend: Moderator Trusted User