This year’s election is proving to be one of the most contentious battles for the White House the country has seen in years. Both Republican and Democratic candidates have established their platforms on issues from immigration reform to healthcare. Aside from those issues, a robust economy and low mortgage rates, where do some of the 2020 presidential election candidates stand on housing policies, and how will their plans affect the first-time homebuyers out there?
Republican Incumbent President Donald Trump
In September 2019, the Trump Administration announced its plan to reform the housing finance system and privatize the government-backed mortgage entities Fannie Mae and Freddie Mac. The Treasury Housing Reform Plan has three focal points: 1) limit the role of the federal government within the mortgage market, 2) protect taxpayers from future bailouts, and 3) promote market competition in the housing finance system.
Proponents of the plan argue that it promotes sustainable homeownership and staves off a severe housing crisis like the one in 2008 that saw housing prices plummet nationally—on average almost 20 percent. Critics of the plan argue that a mortgage industry regulated by the free market is inherently biased against low-income families, therefore becoming a barrier to homeownership for many.
Private lenders favor strong credit and stable incomes, so young adults (who typically have shorter credit histories and lower incomes) may find it more difficult to get approved for a mortgage. On one hand, this could limit the number of younger buyers entering the market, thus reducing the potential business opportunities for agents. Conversely, it could mean that buyers who do enter the market will provide greater purchasing power for agents to benefit from.
Democratic Candidate and Former Vice President Joe Biden
The former vice president and Senator from Delaware hasn’t announced a universal housing policy as of this writing. Thus far, he has campaigned for justice system reforms that focus on providing paths to housing for those with criminal records. He also plans to invest in low-income communities “to ensure that every American has access to clean drinking water, well-paved roads, high-speed broadband, safe schools and affordable housing.”
Though Biden’s universal housing plans remain unclear, his platform champions an expansion of middle-class jobs and opportunities, revitalization of distressed cities and climate-centric incentives for homeowners to retrofit their buildings for reduced carbon footprints.
What could this mean for real estate agents? While it’s hard to say without a definitive plan, Biden’s “second chance” policy could potentially squeeze the starter home market even tighter than it already is, depending on how and where his efforts are focused. This could increase the price of starter homes and mean more showings and offers as you help your buyers find a home and place the winning bid. It could help homeowners to sell their homes faster and receive more competitive offers.
Democratic Candidate Senator Bernie Sanders
Among the Vermont Senator’s proposals is one that would end mortgage sales to Wall Street vulture funds and “thoroughly investigate and regulate the practices” of large rental housing investors and owners. Sanders also wants to boost enforcements to protect buyers from potentially fraudulent or predatory mortgage lending practices and ensure that all lending costs and risks are clear and highly visible, instead of buried in the fine print.
What could this plan mean for real estate agents? These measures could mean that fewer homes fall into foreclosure, reducing market volatility that could negatively affect buyers. However, it could also reduce inventory in an already tight market. Additionally, the protective policies could help prevent buyers who lack homeownership education or experience from defaulting on their mortgages.
Democratic Candidate Senator Elizabeth Warren
The Massachusetts Senator’s housing platform rests largely on reducing rental costs by 10 percent by investing “$500 billion over the next ten years to build, preserve, and rehab more than three million units that will be affordable to lower-income families.”
Warren also plans to invest in middle-class housing opportunities with a “Middle-Class Housing Emergency Fund,” a $4 billion spend to construct new housing for middle-class renters in communities with severe housing supply shortages. How could this affect real estate agents? Such a laser focus on increasing rental opportunities could decrease the demand for available homes for sale, subsequently driving home prices down into more accessible levels for entry-level buyers.
Housing may not be one of the hot-button issues this election year, but it’s still important to be informed on the issues. Do you have questions about how the 2020 presidential candidates will affect first-time homebuyers? Head over to our Secrets of Top Selling Agents Facebook Group to see what other agents may have to say.
This story has been updated.
Mark Mathis is vice president of Sales for Homes.com. For more information, please visit marketing.homes.com.
Your opinion seems to be slanted against President Trump. Look at housing for the past 3 plus years and you will get an ideal where Trump stands on housing. Lower interest rates equals fantastic housing sales for everyone.
You didn’t talk about Mayor Pete’s proposed policies. Would be interesting to hear what he has to say since, as Mayor of South Bend, his One Thousand Homes in One Thousand Days program helped people rehab old houses and they also demolished and rebuilt homes in previously decaying neighborhoods.
Vote for anyone but the three Democratic Socialists candidates.
Sincerely,
A former Democrat happy with Trump policies. He earned my vote and every one that wants to keep their money should vote Republican.
Capitalism will prevail. Vote for Trump. Socialism under Sanders and Warren is not sustainable and will destroy America. Biden cannot be trusted to do anything, but line his own pockets.
What about Amy K? Buttigieg ?
What about Pete Buttigieg? What can you tell us about his policies and how they’ll affect buyers?
Buyers can’t buy if they are unemployed or don’t make enough monthly to afford the payment.
It’s startling to see which Bernie Sanders proposals you have highlighted and your negative spin on them! Especially when there are 2 proposals which you have not even mentioned, that will have a tremendously positive impact on realtors personally and on the industry as a whole.
Sanders’ signature Medicare for All bill stands to benefit every self-employed real estate agent by eliminating insurance premiums; office & specialist copays; eliminating annual deductibles and out of pocket expenses; all of which can add up to tens of thousands of dollars annually! Additionally, it will include dental care, eyeglasses, hearing aids, long term care and a cap on prescription drugs at $200/yr. The plan will be paid for by imposing a modest income tax, that exempts the first $29,000. Gven the fact that so many realtors are self-employed and don’t have employer provided insurance, this proposal would be a tremendous benefit to individuals in the real estate industry.
The other signature plan that you should be raving about is the elimination of all student loan debt and all medical debt. Mortgage loans are largely driven by Capacity to Pay. With Sanders’ proposal to forgive tens of thousands of dollars per person in obscene medical debt and outrageous student loan debt, millions more buyers will be able to enter the housing market for the first time, affording higher priced homes, or be able to upgrade their homes if they are homeowners currently.
One would think that the real estate industry would be promoting these signature plans from Bernie Sanders enthusiastically.
Please rethink your remarks and your position on the agenda that will benefit your industry in the most positive ways!
2 signature Sanders bills would help the real estate industry tremendously:
1-The Medicare for All bill will benefit everyone in America who is self-employed, a vast number of real estate agents included.
2 – Forgiveness of Student Loan Debt and Medical Debt will vastly increase disposable income, thereby allowing millions more home buyers to enter the market, afford higher priced homes, or upgrade current homes.
Its unfortunate but the writers bias is showing and not covering more candidates is wrong.
We have already been working on predatory lending since the downturn. The problem before was also allowing people who buy homes that couldn’t afford them. More regulations from Bernie or any of them isn’t going to help.