What a Trump 2024 Win Could Mean for the Housing Market — Especially for Millennials and Gen Z
According to the United States Census Bureau, the average sales price of a home is $505,700. Typical interest rates on 15-year and 30-year, fixed-rate mortgages have been hovering around 6% to 7%, which doesn’t include other fees that increase the total cost of financing a home.
With the upcoming presidential election, many prospective homeowners debate whether to buy a home now or wait until things settle down with the next president in office. After all, government changes often come with economic shifts, including the housing market. Interest rates may come down or — less ideally — home prices will rise.
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While it’s too early to say what’ll happen with certainty, here are some experts’ predictions on what might happen with the housing market and how it could impact younger generations if former President Donald Trump gets re-elected.
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More Supply but Higher Prices Could Be on the Horizon
According to Dennis Shirshikov, head of growth at GoSummer and a finance professor at the City University of New York, a Trump win is likely to influence the housing market in several key ways. Two of the big ones are in terms of economic growth and supply.
“Historically, Trump’s administration focused on deregulation and tax cuts, which can stimulate economic growth,” Shirshikov said. “Lower corporate taxes and reduced regulation may lead to increased investment in housing development, potentially boosting the supply of new homes.”
While this is good news for Gen Zers and millennials buying homes, there’s a caveat. Though more home development could lead to lower housing prices, Shirshikov believes that housing demand might outpace the supply, ultimately leading to higher home prices.
Around 1.4 million new residential homes were built nationwide. In 2020 — the latest data available from the National Association of Realtors — there were 5.64 million homes sold, 822,000 of which were new constructions.
Now, according to Marketing Charts, Gen Z and millennials account for roughly 42% of the U.S. population, or 142 million people. While not every single person from these generations is going to buy a home in the next few years, if historic trends repeat, there could still be a significant gap between the available supply and demand. That means the potential for rising home prices — and that’s not even accounting for inflation and other economic factors that tend to lead to more expensive properties.
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Interest Rates Could Drop but Homes Might Not Be Cheaper
Mortgage interest rates are a frequent topic of discussion, and for good reason. When buying a home, even a 0.5% rate difference could significantly impact the total cost of that property — and the monthly payment.
If Trump gets re-elected, it could mean lower interest rates.
“The Trump administration previously advocated for lower interest rates,” Shirshikov said. “If this trend continues, mortgage rates could remain low, making home loans more affordable and potentially increasing homeownership rates.”
To illustrate this point, Shirshikov said that, during Trump’s first term in office, the housing market saw significant growth despite the economic uncertainties of the time. This was, in large part, due to low interest rates and strong economic policies.
Lower rates as it applies to more affordable homes are good news for younger generations, especially if they’ve never purchased property before and don’t have a large down payment or other assets to their name; but lower rates don’t automatically mean it’ll be easier to buy a home.
“On the flip side, lower rates might lead to higher home prices as more buyers enter the market, driving up demand,” Shirshikov said.
A Second Term Could b=Be a Double-Edged Sword for Younger Generations
Should Trump take the Oval Office a second time, the impact on Gen Zers and millennials could ultimately be mostly positive or mostly negative. It primarily depends on the individual’s financial situation.
“These generations are in critical stages of their financial journeys, often dealing with student loans, entering the job market, and considering homeownership,” Shirshikov said. “Policies that promote job growth and maintain low interest rates could significantly benefit [these generations] by providing more opportunities to save, invest and purchase homes.”
At the same time, these changes could prove more beneficial to older generations — and more established homeowners — than for younger buyers.
“When it comes to generational impact, I believe a Trump re-election would have varying effects. Millennials and Gen Z, many of whom are first-time home buyers, might benefit from favorable rates and job creation policies but could struggle with rising home prices,” said Joe Stance, a real estate and market trends expert at Stance Commercial Real Estate.
“Meanwhile, older generations with established equity could see their property values increase,” Stance said. “But policies focused on deregulation often benefit those with existing capital more, potentially widening economic disparities across generations.”
Martin Orefice, CEO of Rent To Own Labs, also weighed in on the potential impact on the housing market as it applies to younger buyers.
“A Trump win is going to lead to lower taxes and environmental regulations, both of which will help to spur new construction, but we’ll also see less support for affordable housing,” Orefice said. “This is going to be good news for suburbs, real estate investors and established homeowners, and bad news for renters and first-time homebuyers. Since renters and first-time homebuyers are likely to be younger, I expect most of the financial burden to fall on them.”
Ultimately, the next president’s impact on the housing market will likely be widespread, but Gen Z and millennial homebuyers — especially first-time buyers — might struggle with rising costs, even as interest rates might drop and supply might increase.
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This article originally appeared on GOBankingRates.com: What a Trump 2024 Win Could Mean for the Housing Market — Especially for Millennials and Gen Z