How Tuesday's Vote Affects Your Home's Value

Tuesday's national election is very close for control of the House of Representatives and the president's office, while the Senate is leaning heavily toward Republican control. (Sources: 538, NPR, TheHIll.) 

With this in mind, how would the two presidential candidates' policies affect the housing market? Here is a brief summary of each, followed by how they would affect your home's value.

Taxes

Harris would expand the child tax credit, give a $6,000 credit for new parents, and increase the capital gains tax to 28%. She has also proposed a wealth tax. Trump would extend his 2017 tax cuts, including the higher standard deduction and child tax credit boost. He would eliminate taxes on social security and overtime pay. Both would end taxes on tips. 

Trump plans increase import taxes to 10%, increasing the rate to 60% for goods from China. Harris would keep the current tariff structure.

For corporate taxes, Harris would expand the expense tax deduction for start-ups from $5,000 to $50,000. Trump would lower the rate to 15% for companies that manufacture domestically. 

Housing

Harris plans to give $25,000 to first-time homebuyers. She would cut taxes for homebuilders selling to moderate-income families, and those who would build or renovate 400,000 owner-occupied homes in low-income areas. She promised to expand low-income tax credits for affordable rental housing. 

Trump plans to open up federal land for homebuilding, provide tax incentives for first-time homebuyers, and reduce mortgage rates by lowering inflation. (Source: WSJ.com, "Trump Treasury Contender Pledges to Work with Musk to Slash Spending." October 29, 2024. The Guardian, "Where do Trump and Harris stand on housing, taxes and other policies?" October 29, 2024.)

Note

The president can change regulations and create some programs, but the U.S. Congress is the only body that can change the tax code. Most of the candidates' proposals would need the majority approval of both the Senate and the House of Representatives. 

That means the new president would need both houses of Congress to be led by his or her party to make passage of their proposals likely. Assuming this is the case, how would these proposals affect your home's value?

Effect on Real Estate

Most of Trump's policies, such as cutting taxes and freeing up land for homebuilding, would boost economic growth. Too much, though, could bring back inflation, which would delay further rate cuts by the Federal Reserve. This would lower demand for housing, and keep a lid on home prices. 

Trump's tariffs would also boost inflation by increasing prices on imports. If our trading partners respond with a trade war, however, it could also slow economic growth. As a result, higher inflation and interest rates would keep mortgage rates high, and the housing market stagnant.

Harris's tax increases would slow economic growth, causing fears of recession. This might reduce inflation, and lower interest rates, but frighten buyers from making any new purchases.

Her targeted tax credits for new families, new homebuyers, and affordable home construction and rentals, would help young families and lower-income areas. This limited approach would help those housing sectors a great deal, and could spread over time to the larger real estate market.