By Gregory Heym, Brown Harris Stevens Chief Economist and host of Crossing The Line

I’ve received several emails over the past week about the impact the election will have on the economy and housing market. At this point, it’s much too early to  answer those questions, as President-elect Trump doesn’t even take office until  January 20.

That leaves us with a lot of campaign promises, but not a lot of facts. And with small Republican majorities in the House and Senate, it will be challenging for  Trump to enact big policy changes. History has taught us that presidents typically accomplish only a small percentage of their agenda, even when their party has control of Congress.

That said, here are some of Trump’s proposals that could help the economy and housing:

• While he wants to extend much of the Tax Cuts and Jobs Act of 2017 that expires next year, he has said he would eliminate the $10,000 cap on state and local tax deductions. Removing the SALT cap would provide a huge boost to housing markets in New York, New Jersey, and Connecticut.
• Trump has expressed interest in exempting tips, Social Security Benefits, and overtime pay from taxes.
• Lowering corporate tax rates has also been mentioned, which helped fuel the post-election bump in the stock market last week.

There are also a few areas of concern, which include:

• The impact of tariffs and tax cuts on inflation. The 10-year Treasury rate surged the day after the election, based on the theory that high tariffs combined with tax cuts would reaccelerate inflation. It’s important to keep in mind that 10-year treasuries and mortgage rates were already rising before the election, and mortgage rates declined this week for the first time in seven weeks.
• There’s also concern that stricter immigration policy could hurt the supply of labor, especially for construction workers. We all know there’s a severe shortage of housing in the U.S., so any potential disruption of new construction would be damaging.

If you’d like to read more about the potential impact of the election on the economy and housing, here are some articles I found interesting:

• What Trump’s Win Means for the Economy-WSJ
• Here’s what the Trump presidency could mean for the housing market, experts say-CNBC

Housing markets are driven by supply and demand factors that are not contingent  on the outcome of elections. No matter the result, people still need to buy and sell 
homes. And after the dust settles, we are left with the same housing markets we had before November 6.

For the latest on the economy and real estate market, subscribe to Crossing the Line today! 

Posted by Alexander Powers, BHS Content Team