House builders and potential buyers are on tenterhooks as the U.S. prepares for the 2023 presidential election. But one of the most concerning factors is whether the result will have any effect on real estate, house prices, and so on.
Since the pandemic, there has been a lot happening in the housing market. It was booming during the pandemic (due to the rates being low), but now not so much with the Federal Reserve continuously raising the interest rates to mitigate inflation.
This article talks about the factors that could affect real estate in the US After the 2023 Elections and the effects the upcoming president could foreseeably have.
1- The Uncertainty That Comes With the New President
The mid-term elections of a new president in 2023 will impact real estate. The new president will be tasked with creating a new tax plan and managing the country’s economy. While none of these issues is directly related to real estate, they are surely indirectly linked with impacting real estate in the coming year.
This is because of the uncertainty that comes with a new president. A majority of the people would be waiting for the policymakers to make policies that alleviate the gradually increasing real estate dilemma. And, if there are any significant setbacks in the newly announced policies, it could negatively impact home prices and sales in 2023.
2- A Rise in the Interest Rates
In the wake of the elections, the Federal Reserve announced a rise in interest rates. This rate hike will have several effects on real estate in the United States.
For buyers, the higher interest rates will mean higher monthly mortgage payments. This could put a damper on the housing market, as buyers may be hesitant to purchase a home when their monthly payments are increased.
For sellers, the higher interest rates could mean more buyers are looking to buy homes before rates go up even more. This could lead to a rise in home prices, as demand for property increases.
The rise in interest rates will also affect those who are looking to refinance their mortgages. With higher rates, refinancing may not be as advantageous for homeowners, as they will now have to pay more interest on their loans.
Overall, the rise in interest rates could have mixed effects on the housing market in the US. Buyers may be hesitant to purchase property due to the increased monthly costs, but sellers could see an uptick in demand and prices for their homes.
3- A Change in Tax Rates, Deductions, and Credits Might Be Inevitable
The tax deductions and credits for property owners are among the longest-running tax breaks on record. But, like other tax deductions and credits, they need to be approved to be extended.
This means that the incentives, like low property taxes and affordable housing, that make owning real estate a more affordable option could be up in the air. They may increase or decrease according to the new people elected. Property tax rates and capital gains taxes can change as well, depending on who moves into office.
4- The Election Process
It’s no secret that the US election process is a long and complicated one, and we all know that midterm election years are often marked by higher levels of market volatility and that it tends to rise in fall during both midterm election years and non-election years.
However, there are some key differences between midterm election periods and non-election periods when it comes to market volatility. During midterm elections, investors are often attempting to discount what the composition of Congress could mean for fiscal policy, and potential regulatory or tax changes.
So, what does all this mean for real estate? Well, unfortunately not much can be said for sure until after the new president is inaugurated. However, there are some potential implications that could affect the housing market, depending on which candidate becomes president.
Conclusion
The new president can either provide a boon for the economy by coming up with policies that stabilize housing prices and mitigate the rising mortgage rates across the country or on the other hand, make the situation worse by not being able to triumph over the contemporary real-estate-based issues in time.
It’s difficult to predict what will happen regarding real estate in the US under the new president’s policies. However, it’s safe to say that it will be an interesting year for buyers and sellers alike