Jonathan Smoke, chief economist of Realtor.com, says that from his perspective and those of his trusted economist counterparts, the election of Donald Trump as our new President-elect is a good thing for the short- and medium-term economic forecast. He also says that he was confident that the economy, and the real estate industry, would continue to grow regardless of which candidate was elected office, though potentially at different rates. He writes:
Regardless of exactly how much the economy grows next year, we are now in the midst of two massive demographic waves that will power above-average demand for homes for at least the next 10 years. And neither of these two factors has anything to do with our new president-elect. The biggest generation in history is the largest buyer of homes in the U.S. This is leading to a recovery in first-time home buyers. At the same time, we have the second-largest generation in history moving into retirement.
My biggest concern about next year has to do with financial markets. If Trump’s presidency eventually leads to stock market declines and/or substantial volatility in stock prices, luxury price points and second-home markets could suffer. But the single financial factor that will affect the market the most will be what happens to mortgage rates. The key question becomes: Just how high will rates go? Before the election, most forecasts called for an increase of 50 to 60 basis points in the next year. (A basis point is 0.01%.) But in one week, we’re already halfway there!