Trump's Win Could Dampen Near-Term Housing Demand
We have mixed thoughts on the near-term impact, but the election may spur increased confidence in some Americans, which could act as a tailwind for housing.
Political and economic uncertainties generally act as headwinds for home sales, but in the months leading up to the election, housing data mostly remained quite strong. However, with the election of Donald J. Trump as the 45th president of the United States, we have mixed thoughts on the near-term impact the election may have on housing. We think that the related uncertainty and market volatility could dampen near-term home sales. At the time of this writing, S&P 500 futures have recovered from session lows; however, we think sustained market weakness would no doubt have a negative impact on housing demand. That said, according to the Fannie Mae Home Purchase Sentiment Index survey conducted before the election, more than half of Americans surveyed believe the United States economy is headed in the wrong direction. We see the election results as a strong mandate for change in Washington, and we submit that the election outcome may spur increased confidence in some Americans, which could act as a tailwind for housing. At this time, we are not materially updating our housing forecast, and we will review the longer-term impact the election may have on housing fundamentals as more policy details emerge from the Trump administration.
We are hopeful that the administration’s economic policy can spur key drivers of housing demand that are sorely needed, such as wage growth and sustained consumer confidence. We will also monitor the administration’s immigration policy, which could negatively impact the supply of construction laborers. Homebuilders are currently facing labor shortages, and we think this shortage could be exacerbated by stricter immigration policy and increased national infrastructure spending that would further increase demand for construction labor.
Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.