Based on US a national poll Affordable housing was found to be a top priority for most American voters. Despite the fact that the campaign is largely based on the economy, none of the presidential candidate has shown holistic view on the housing policy, leaving voters guessing who will be the favourite candidate to drive the U.S. housing market. According to Rick Sharga, vice president of Ten-X, ‘’one party is talking about affordable housing, while the other party is talking about deregulating a financial market that seems to have largely seized up’’.
To weigh the best candidate who would positively support the U.S. housing market, one has to carry out an in-depth scrutiny at their wider economic policies to ascertain how they trickle down to housing.
Republican Donald Trump, a real estate mogul who has invested largely in hotel and multifamily housing development, has said even less about housing than Democrat Hillary Clinton. Trump’s whole campaign is about growing the economy and smashing through regulations. His immigration reform policy will directly impact on housing. Since Immigrants are one of the largest drivers of household formation today, implying, if Trump presidency slows down the tide of immigrants or actually force immigrants already here to leave the country, this would trickle down to housing demand.
On the other hand, Clinton has also put forth proposals to increase homeownership, which is now hovering near record lows. She has promised to provide down payment assistance to “underserved” communities. This proposal mainly focuses on down payments ignoring the fact that it is the need for a high credit score which is preventing many Americans from buying homes. And even if the proposals do help more people to buy, the eventual outcome will be higher house prices, benefiting existing rather than potential homeowners.
One thing that can solve the housing problem is the easing of regulation in the banking industry, but neither Trump nor Clinton has said anything about reforming the mortgage market and dealing with Fannie Mae and Freddie Mac.
Without the realization by both candidates that housing is pivotal to economic growth, as it contributes to the economy in various ways ranging from homeowner spending to the jobs and materials used in home construction, their claim to grow the economy might be elusive.
Therefore, there is need for the candidates to align their housing policies with the realities of the housing market. They should be clear on how they will confront the issue of mortgage reforms. Since boosting home ownership means making mortgages more affordable and more accessible. This can only be achieved by the next administration ,first, giving a clear road map on how to tackle the reforms of mortgage giants Fannie Mae and Freddie which are highly profitable and dominate the mortgage market, but they are still under government conservatorship, paying the U.S. treasury department every cent of profit. Other issues that the housing policies should address includes; How to bring private capital back to the market? How to do we manage enormous growth of nonbank lenders? How do we insure safety of borrowers use these lenders? and how do we create more affordable housing, both rental and owned for underserved communities?
In conclusion the key primary driver of household formation and homeownership remains to be strength or weakness of the economy, jobs and income growth. There is need for complete overhaul of the mortgage market to enable homebuilders full advantage of the current strong housing demand.
The article was prepared by the blog editors of EssayPro.Club website.