It’s Official: A Democratic Sweep… Now What?
Although the parties in office play only a small role in the performance of housing, we are often asked about the historical impact of the party in office. We analyzed the last 50 years and found that a Democratic president and Democratic Congress has occurred 14 of the last 50 years, resulting in the following:
- Below-average stock market returns
- Average inflation
- Average interest rates
- Below-average new home sales
Now that Democrats have strengthened their majorities in both houses of Congress and appear close to a level of domination in the Senate that would enable them to push through major legislation, we can anticipate a degree of carte blanche to accompany complete control. In a nutshell: anything is possible.
Right now, the industry is focused on measures of immediate stimulus such as a home buyer tax credit, a substantial interest rate subsidy program with a tiered structure over time (possibly beginning at 2.99 % on a 30-yr. fixed), and extension to NOL. But there are issues, beyond the top-line headlines, that should be on the dashboard of anyone involved or invested in the future of housing.
Based on our analysis of the campaign, we also expect the following:
- Increasing union power
- Increased taxes on the wealthy, which is hopefully somewhat offset by tax credits for employers
- Improved savings programs
- Increasing regulation of all kinds
- A realization that not everyone is responsible enough to be a homeowner