The next U. S. election will not only concern who will occupy the White House or Congress. The result of the election can have certain effects on almost all spheres of life, including real estate. Therefore, first-time homeowners may be either way in the sense that the results of the election could potentially affect their chances of owning a home. That is because of the political influence directly or indirectly on the price they would afford and the processes of acquiring a mortgage.
This article highlights how the election in the U.S. may likely impact first-time home buyers through three key policies: housing, taxation, and economic policies.
Change in Housing Policies
The election can most directly impact first-time home buyers through housing policies. Political parties and candidates in power may have different opinions about the housing sector, which can lead to changes in policies, incentives, and programs to encourage first-time homeowners.
Fed Rate on Mortgage
Interest rates are a primary concern of home purchasers who wish to acquire a mortgage. These rates vary with economic factors and policies made within the lender’s jurisdiction. The Federal Reserve sets the base interest rate, and this could change due to changes in the forecasted economic scenario occasioned by the election. For instance, if the election results in policies that increase the economy’s growth, interest rates may be raised to curb inflation, which translates to expensive mortgages.
First-Time Ownership Programs
In its capacity to accommodate first time homeowners, the government provides incentives such as grants for the down payment, tax credit, and reasonable interest rates on the loans. These programs can be readily accessible and formulated in a manner that the political party in power controls.
For instance, a candidate who has a policy based on enhancing and providing affordable housing may develop these programs to enhance the provision of affordable facilities so that first-time buyers can access the market.
Review of Taxation Policies
Tax measures are particularly important to homeownership. Mortgage interest, property tax, and homebuyer tax credits are forms of tax credits that lower the actual cost of owning a home than the stated price. Depending on the election results, these changes in tax policies can either enhance or detract from the value of purchasing a home.
Mortgage Interest Deduction
Mortgage interest deduction enables homeowners to claim a reduction in their taxable income to the extent of interest on the mortgage. This deduction is especially important for first-time homeowners who could otherwise lack steady cash flow. However, if the election results in abolishment or change in laws that affect this deduction, it might lead to a rise in the cost of the homes, making first time homeownership unaffordable.
Property Taxes
The election also affects other policies within a state, such as taxes or federal policies. Property taxes differ greatly throughout the U.S. and could fluctuate depending on the state’s leadership. For first-time buyers, it is necessary to focus on how these changes might impact the overall affordability of homes in a given state.
Overall Economic Policies
Apart from direct housing policies, the general economic climate arising from the election affects the housing market. The following factors have a considerable impact on first-time homebuyers’ ability to own a home.
Partnership with Developers
Some candidates support subsidy programs that may increase the availability of new homes. Such measures might involve offering tax exemptions to developers seeking to provide affordable houses or even large construction projects funded by the government. Should they be introduced after the election, first-time buyers would have more choices of affordable houses in the market.
Affordability of Customised Units
First-time home buyers particularly need a good job market to help them secure the needed finances to own their dream home with all the features they can afford. Improving employment opportunities and increasing wages mean that individuals can now afford to spend more on units with classy interior design.
Hence, they can have their units customized to meet their preferred interior design, even if it may cost them more than standard houses. For instance, one may opt to have kitchen cabinets that are custom made to suit the size of the kitchen and their needs. Customizing other rooms with vanity fittings will also make the home more appealing and comfortable to live in.
Therefore, the favorable implementation of policies that promote job creation together with economic steadiness may facilitate the entry of first-time buyers into making their own house design decisions.
Potential Market Uncertainty
Investors and consumers tend to hold off on buying properties during elections due to the uncertainty in the market. These may influence home values, borrowing costs, and buyers’ appetite for the market. First-time home buyers should be careful because election years can influence market fluctuations as they seek to find a home.
