Real Estate with Trump

Happy Friday everyone! Some exciting news to be shared around the markets as Trump is set to return to the White House.

This newsletter is 669 words long, a 2.67 minute read

Mortgage Rates

Jerome Powell says he’s staying

A lot of Trumps campaign circled around the Economy as he boasted strong numbers during his first four years and his dealings with Covid. In 2024, he mentioned making changes to the FED including the removal of Chairman Jerome Powell. Trump continues to say he should have a say on interest rate decisions and his campaign have tried to impede on the FED.

Yesterday, Fed chair Jerome Powell said bluntly yesterday he would not step down even if the president-elect asked him to, and that it would be illegal for the president to fire or demote a Fed governor. Powell is seeking to protect the central bank's distance from politics and maintain long-established norms around its independence — which look likely to be be tested over the coming four years.

The FED continued with their scheduled 25 bps cut and wants to continue this through the end of the year and beginning of 2025.

Potential Demographic Shifts from Trump’s Election

1 in 3 Americans Want To Relocate If Their Presidential Candidate Loses

Harris supporters worry about issues like a national abortion ban (54%), racial inequality (53%), and potential rollback of progressive rights (52%). Trump supporters focus on inflation (72%), economic challenges (59%), and border policies (55%).

Despite relocation considerations, only 3% of respondents definitely plan to move, while 62% cite financial limitations as a primary barrier. Emotional ties and job stability also deter relocation decisions. link

Zillow says recent homebuyers are getting creative to combat high mortgage rates

Despite rising mortgage rates, 45% of recent home buyers secured rates below 5%, leveraging various strategies. Techniques included special financing (35%) and contingent rate offers (26%), with 28% benefiting from assistance from family or friends.

Borrowers who received rates between 4% and 5% often used ARMs, shorter-term loans, or projected rental income, with 60% securing lower rates using rental income and 57% with ARMs. About 63% pursued down payment assistance, highlighting diverse financing tactics.

Shorter-term loans like 15-year mortgages became popular among low-rate buyers, with a 65% uptake compared to 45% among all buyers. Experts suggest exploring creative financing options to manage high mortgage rates in today’s market. link

U.S. markets to watch with increasing office operating expenses

San Antonio, TX experienced the most substantial rise in operating expenses, with a 10.4% increase in total operating expenses and a 4.7% rise in operating expense ratio. This is notably higher than the 50 largest MSAs' average increase of 4.6% in total operating expenses.

Rising property taxes in San Antonio, driven by increasing property valuations, have been a major factor, as Texas lacks income tax and relies heavily on property tax. Costs for repairs and maintenance, including HVAC and elevator servicing, have also seen significant inflation. link

Where Minimum-Wage workers can actually afford rent

In Buffalo, the most affordable city in the study, renters making the local minimum wage of $15/hour still spend 39% of their income on a one-bedroom costing $1,001 monthly. To meet the affordability threshold, Buffalo’s minimum wage would need to increase to $19.25/hour.

In Atlanta, minimum-wage renters need 132% of their income to afford a typical one-bedroom at $1,653/month, with similar burdens in cities like Nashville and Charlotte. This highlights significant financial challenges for Southern renters.

In New York City, where minimum wage is $16/hour, renters would still spend 84% of their income on a typical one-bedroom costing $2,330. High costs of living make affordable housing nearly unreachable in major urban areas. link

Median House House

That’s all for this week folks! As always, subscribe if you’re new and share with a friend!

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The information provided in this newsletter is for informational and educational purposes only and does not constitute financial, investment, or real estate advice. The content is based on the opinions and research of the authors and may not reflect the most current market conditions or developments. The analysis of properties is done without consideration of each platform’s fees. Always conduct your own research and consult with a qualified financial advisor or real estate professional before making any investment decisions. The authors and publishers of this newsletter disclaim any responsibility for decisions made based on the information contained herein.