As the 58th presidential election draw closer, many in the mortgage industry are wondering who will win and how the new president will impact housing.
Housing, for the most part, has been considered a taboo among the presidential hopefuls, and the industry still does not have a clear picture of what exactly the candidates intend to do for U.S housing.
Zillow's latest Home Price Expectations (ZHPE) Survey of 107 experts found that if Donald J. Trump or Sen. Bernie Sanders were to win the election, the smooth housing road and overall economic outlook could run into a few bumps.
The survey questioned respondents about the anticipated impact Sec. Hillary Clinton, Sen. Ted Cruz (R-Texas), Republican Ohio Gov. John Kasich, Sanders, and Trump would have on U.S. housing and the economy. According to the responses, economists predicted home price appreciation would be up 4 percent year-over-year at the end of 2016, higher than predictions of 3.7 percent indicated in the previous survey.
However, if Sanders or Trump is elected, the economists lowered both their expectations for home values and the overall performance of the U.S. economy.
Zillow Chief Economist Dr. Svenja Gudell said, "As the presidential election nears, candidates' individual plans for the economy are increasingly under scrutiny. Many of the candidates' proposals sounds appealing to voters, but a closer look through the panelists' economic lens reveals the potential impact of those proposed policies on our economy."
She continued, "The results from this survey show us that, from these economists' standpoint, the more centrist candidates from either party would be best for the economy and housing market. Respondents saw the more polarizing political leanings of Donald Trump and Sen. Sanders as having a negative effect."
"That's where the hesitation comes in. There is uncertainty in the unknown." -Brian Montgomery, Vice Chairman, The Collingwood Group
Vice Chairman of The Collingwood Group, Brian Montgomery, sat down with MReport to provide his take on the how the presidency will affect housing, particularity if Republican nominee Donald J. Trump or Democratic candidate Sen. Bernie Sanders (I-Vermont) wins the election.
"I don't disagree with the report. However, I was taken aback by the extra negativity toward Trump, and I began to wonder how they came to that conclusion," Montgomery stated. "I think the problem with Trump is that it is still unknown what he would do for housing. I think that's where the hesitation comes in. There is uncertainty in the unknown. There is a little of the unknown among all the candidates."
Montgomery noted that there wasn't a whole lot on the republican side relative to the issue of housing a couple of months ago. Trump hadn't really said anything about housing, except for his comments on Dodd-Frank being a disaster and making it hard for banks to lend.
"If you asked Republican candidates what TRID was, they would probably say, "An island in the Caribbean." They probably would not even be sure what it was," Montgomery said.
On the Democratic side, Montgomery explained that Hillary was, quite frankly, the only candidate to put out a comprehensive housing plan. One problem he identified in her plan was that she wanted to increase homeownership by increasing enforcement. Bernie Sanders doesn't really talk about homeownership, but he does talk about subsidized and affordable housing, Montgomery said.
"If Trump wins the presidency, he will place confident people in the government agencies to run them and probably not have much to say about them in the short-term," Montgomery said. "On the other hand, Sanders' economic policies would require taxes to be raised significantly. I am no economist, but with little economic growth and labor participation rates still low, I am not so sure that raising taxes would get [the U.S.] where we it needs to be."