Most Americans view the 2012 presidential election through the lens of economic stability and they are asking themselves this question: “Which candidate, Barack Obama or Mitt Romney, will be better for the US economy and the real estate market?”
Although I believe that this question in general is the most important when deciding at the polls, the reality is most Americans are more concerned about their personal economy. Jobs, salaries, investments, expenses…these are the topics that are typically at the forefront of American conversations.
Homeownership & the Real Estate Market
And one of the largest factors of most American’s personal economy is real estate thanks to homeownership. According to Wikipedia the homeownership rate in 2009 stated 67% of all occupied American housing unites were occupied by the owner.
So what does the 2012 presidential election mean for real estate value at large? What does it mean for the Nashville real estate market?
What’s interesting is that neither candidate so far has outlined a specific proposal for the real estate market or mortgage lending, but there are two major housing issues that will immediately have to be addressed by the President.
2 Things That Will Be Affected By The Next U.S. President
1. Mortgage Lending Standards
The next president will have to decide whether to ease up lending standards to make it easier for more people to qualify for a loan and the amount of down payment needed to buy a home. Since most loans are eventually sold to Fannie and Freddie, their regulations dictate the private market.
According to a recent article in the Washington Post this decision will have a huge influence on the real estate market and the price of real estate, both for the lower end of the market the higher end that has lagged.
Obama has stated that he would like to help more responsible borrowers refinance their mortgages, while taking concrete steps to help families stay in their homes, revitalize the communities hardest hit by the housing crisis, and reform the mortgage lending market to better protect both consumers and taxpayers.
Romney has stated that mortgage lending regulations are good, but the ones in place are antiquated and need to be update to allow smaller financial institutions a doorway back into the mortgage lending market. Details of both plans are currently lacking.
2. Mortgage Relief Programs
According to a recent article in the Washington Post (via Realtor.org), if President Obama is re-elected he is expected to continue adding to his existing programs, such as in foreclosure relief, loan modifications, and by expanding refinancing options for home owners. He is also expected to continue to push for new housing finance rules under the Dodd-Frank Act, The Washington Post reports.
If elected, Romney is expected to repeal Dodd-Frank and would most likely replace it with regulations that would make it easier for the smaller financial institutions in the private sector to be a stronger player in the mortgage market.
So What’s the Overall Effect of the Election on the U.S. Real Estate Market?
Even with the glaring differences between the candidates real estate market proposals, political pundits think that the system has so many working parts that implementing mortgage-market policy will be difficult and won’t have a tremendous effect on the market at large. Our legislative process will eventually bring both sides to some form of less-radical compromise and therefore create a less than substantial direct impact on the national housing market.
As far as Nashville is concerned, impending growth, economic strength and economic diversity are factors that have a greater impact on the housing market than the presidential election.
You can read more about Nashville and the real estate market here:
Foreclosures For Sale in the Nashville, TN Real Estate Market