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Election Day and Fed Verdict: The Most Important Week of 2025

• David (Viacheslav) Davidenko

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What if the 2025 housing market could defy conventional wisdom, turning post-election years into prime opportunities for homebuyers? Join us as we challenge the norms and explore the interconnected influences of the presidential election, Federal Reserve decisions, and local zoning laws on the housing landscape. We dissect the contrasting housing policies of the leading presidential candidates, Harris and Trump, and speculate on how their approaches might reshape the market. Whether you're a first-time buyer or a seasoned investor, our insights could be the key to unlocking your next real estate success.

While national policies grab headlines, local market dynamics hold the real power to influence your housing decisions. We unravel how local zoning laws and development plans can sway supply and demand, often diverging from the national narrative. Moreover, we examine the ripple effects between the housing and rental markets, providing crucial advice for renters and buyers alike to stay ahead of potential challenges. By understanding these complex layers, you can turn uncertainty into opportunity, ensuring you're well-prepared to navigate and succeed in a constantly evolving market.

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Speaker 1:

Welcome back everybody. Today we're diving deep into what could be a crazy year for the US housing market in 2025.

Speaker 2:

Yeah, things are pretty interesting.

Speaker 1:

Yeah, I mean, it's not every year. We have a presidential election A&D a Federal Reserve meeting practically at the same time.

Speaker 2:

Definitely a lot going on.

Speaker 1:

Definitely you sent over some really interesting articles about this, and one that really jumped out at me was Election Day and Fed Verdict the most important week of 2025.

Speaker 2:

Oh yeah, that's a good one.

Speaker 1:

So will home prices crash or will they go through the roof? Will getting a mortgage be a breeze or a total nightmare, and how will each candidate's plan actually affect everyday people? You know, like you and me. Let's find out.

Speaker 2:

Yeah, it's definitely a unique moment in time, that's for sure, and there's a lot of assumptions flying around, especially when it comes to elections and what they'll do to housing.

Speaker 1:

Yeah, the article even mentioned how election years usually cause a bit of a slowdown in the market. I guess people get nervous with all the uncertainty, right?

Speaker 2:

Yeah, that's the conventional wisdom I guess you could call it. But here's where things get interesting. Data from the Department of Housing and Urban Development, or HUD, and the National Association of Realtors, or NAR, actually shows something surprising. Nine out of the last 11 elections have actually been followed by increased home sales the next year.

Speaker 1:

Wait really, so it's not all doom and gloom after the votes are counted? Nope, huh, that's not what I expected.

Speaker 2:

Right, it seems counterintuitive, but there's actually a good reason for this trend. It makes sense when you think about it, yeah, okay. Any like pre-election jitters are usually short-lived. Once someone wins, everyone kind of feels a sense of relief, like things are going back to normal, no matter who wins. Okay, and that tends to bring both buyers and sellers back into the market feeling more confident.

Speaker 1:

So it's more like hitting the pause button, not slamming on the brakes.

Speaker 2:

Exactly.

Speaker 1:

Okay, that makes a lot more sense. But then we've got this other big event happening at the same time as the election the Federal Reserve meeting. Oh yeah, that's right, that's got to throw even more fuel on the fire. Oh for sure, yeah, that's right, that's got to throw even more fuel on the fire?

Speaker 2:

Oh for sure. And according to the article, analysts are predicting another rate cut, maybe a quarter of a percentage point, which would bring the target range down to between 4.5 and 4.75 percent.

Speaker 1:

OK, I'm going to be honest. All this talk of, like target ranges and basis points makes my head spin a little bit. Yeah, can you translate that into plain English?

Speaker 2:

What does this rate cut actually mean for someone who's, let's say, trying to buy their first home? Yeah, so basically, when the Fed cuts rates, it usually means lower mortgage rates. It's not like an instant thing or guaranteed, but lenders usually adjust their rates based on what the Fed does.

Speaker 1:

Oh OK.

Speaker 2:

So in theory a rate cut could make borrowing a little cheaper and maybe make it a little easier for some people to buy a home.

Speaker 1:

OK, that's one piece of the puzzle starting to make sense. But then there's the big elephant in the room, or maybe I should say the two elephants, the candidates themselves.

Speaker 2:

Yeah.

Speaker 1:

Their approaches to housing policy are like night and day, and that's where things could get really interesting.

Speaker 2:

Definitely yeah, and depending on who wins, these differences could really shake things up in the whole market.

Speaker 1:

For sure. Let's start with Harris. The article highlights her focus on having the government be more involved in the housing market, building affordable housing, offering down payment assistance and even tackling something called zoning reform.

Speaker 2:

Right.

Speaker 1:

Can you break that down for us?

Speaker 2:

So she's proposing to build three million new housing units Wow, which is a lot. On top of that, she's suggesting $25,000 in down payment assistance specifically for first time and first generation home buyers Wow. And then there's that zoning reform piece, which people don't talk about much, but it's super important.

Speaker 1:

To be honest, I don't spend a lot of time thinking about zoning laws.

Speaker 2:

Yeah.

Speaker 1:

Why should our listener care about this?

Speaker 2:

So imagine you want to build a house, but your town has all these rules about what you can and can't do, how high the house can be, how far back from the street it has to be, even what materials you can use. All those rules are part of zoning and they can make building more expensive and take a lot longer, which in the end affects how much homes cost and how many actually get built in the first place.

Speaker 1:

OK, that makes sense. So Harris is essentially trying to streamline all of that to make building more efficient and hopefully, more affordable.

Speaker 2:

That's the idea. The potential benefits are pretty clear More affordable homes and more people being able to buy a home. But like with anything, there are potential downsides to think about. Increased government spending is a big one, and some people argue that too much government involvement can actually mess up the market and lead to problems we didn't expect.

Speaker 1:

Yeah, it's all about finding that balance right, right. So who would actually benefit the most from Harris's approach? Is it really the average person struggling to buy their first home, or are there other winners here?

Speaker 2:

Well, first-time buyers would definitely benefit a lot, especially with that down payment assistance, but also the construction industry could see a big boost with all those government contracts for affordable housing. Right, it's really a complicated web of potential impacts that could play out in ways we don't even expect.

Speaker 1:

Right, yeah, it's like you almost can't predict it. Okay, so that's one side of the coin. Now let's flip it over and look at Trump's approach. The article describes it as much more market-driven, less regulation, a focus on opening up federal land for development and tax breaks for builders. How does this compare to Harris's plan?

Speaker 2:

It's a totally different way of thinking about things.

Speaker 1:

Yeah.

Speaker 2:

Trump says all the regulations are what drives up building costs and stops the market from working properly. He thinks if we cut through the red tape and reduce how much the government is involved, we can let the free market do its thing to increase housing supply.

Speaker 1:

OK.

Speaker 2:

Which in theory should lead to lower prices.

Speaker 1:

So his approach is essentially get the government out of the way and let the market do its thing.

Speaker 2:

Yeah, that's a pretty good summary. And he's not just talking about cutting regulations, he also wants to open up federal land for housing development.

Speaker 1:

Right.

Speaker 2:

This could be a big deal, especially in places where there's not much land available and prices are already really high.

Speaker 1:

Yeah, I can see how that could lead to more houses being built, but here's the big question.

Speaker 2:

Does building more automatically mean lower prices? What are the potential catches with this approach? Like demand, the types of housing being built and, of course, location, location, location. And we can't forget about the environmental impact of developing federal land, which is a whole other issue.

Speaker 1:

Okay, so we've got these two very different ideas for how to handle the housing situation, One focused on the government leading the way and the other on letting the market do its thing Right. It's kind of overwhelming, to be honest. It is a lot to take in.

Speaker 2:

Yeah, but let's try to make this practical for a second. Ok, what does all this actually mean for our listener? Well, when it comes down to it, it's all about figuring out how these different plans could affect you personally, like are you a first time buyer hoping to get some help with a down payment? Are you worried about the environment with all these new developments?

Speaker 1:

Yeah.

Speaker 2:

Those are the kinds of things you want to be asking yourself as you think about what could happen.

Speaker 1:

That's a good point. So we've talked about the historical trends, the Fed's potential rate cut and the big difference between the candidates' housing plans. That's a lot to keep track of, but if we try to put it all together, what are some realistic scenarios for the housing market in 2025? Like what should our listener be ready for?

Speaker 2:

no, matter who wins Well, trying to predict the future is always tough, especially with something as complicated as the housing market.

Speaker 1:

Oh, definitely.

Speaker 2:

But let's try to play it out a little bit. What are the best and worst things that could happen?

Speaker 1:

I like that. Okay, so let's say Harris wins and her plans actually happen. What's the most optimistic outcome?

Speaker 2:

Okay, so let's imagine things go perfectly. Her plans work well and we see this huge increase in affordable housing.

Speaker 1:

Okay.

Speaker 2:

In that best-case scenario, people with lower and middle incomes would finally have more options, even in places they couldn't afford before.

Speaker 1:

Yeah, okay, and maybe, just maybe we'd see some relief from those those sky high rents that have been squeezing so many people.

Speaker 2:

It's possible. Increasing the supply of affordable housing could definitely help slow down those rent increases.

Speaker 1:

OK.

Speaker 2:

But we have to remember these things don't happen overnight.

Speaker 1:

Right yeah.

Speaker 2:

Building millions of new units takes time, even with the best intentions.

Speaker 1:

Right, ok. So patience is key, definitely. But what about the flip side? What could go wrong, even if Harris's plans are put into action?

Speaker 2:

Well, the biggest risk is that the government's efforts to boost construction could actually backfire. Ok Like, if the programs aren't managed well, costs could get out of control and that could make prices go up, not down.

Speaker 1:

Oh, wow.

Speaker 2:

And then there's the possibility of things we didn't expect, like a sudden change in demand or delays in construction.

Speaker 1:

Oof. That's not what anyone wants to hear. Okay, so we've looked at what could happen if Harris wins, both the good and the bad? Now what about if Trump wins? What does his best case scenario look like?

Speaker 2:

So if his deregulation efforts are successful, we could see construction projects happening much faster just because there's less bureaucracy to deal with, and that could lead to a quicker increase in housing supply, which in theory could help bring those crazy prices down.

Speaker 1:

That sounds pretty good for anyone looking to buy a house. But again, what are the downsides? What could go wrong even if everything goes according to Trump's plan?

Speaker 2:

One concern is that focusing so much on deregulation could lead to lower building standards or ignoring environmental issues. Imagine a rush to build as fast and as cheaply as possible, without thinking about quality or sustainability. That could create all sorts of new problems later on Right.

Speaker 1:

There's always that risk of something unexpected happening, no matter which way things go. Yeah definitely so. It sounds like 2025 could be a year of major changes in the housing market, no matter who wins. What advice would you give our listener who's trying to figure out this crazy situation?

Speaker 2:

I think the most important thing is to stay informed and be proactive. Pay close attention to the policies they're talking about and try to figure out how they might affect your local market Right. And if you're thinking about buying or selling, don't let fear or speculation freeze you up.

Speaker 1:

Yeah, ok.

Speaker 2:

Do your research, get your finances in order and be ready to act when the right opportunity comes along order and be ready to act when the right opportunity comes along.

Speaker 1:

Timing is everything right, and it's important to remember that, while elections and Fed meetings can make things a bit crazy in the short term, the fundamentals of the housing market usually stay pretty stable over the long run.

Speaker 2:

Exactly. Don't let the headlines scare you into making bad decisions.

Speaker 1:

Right.

Speaker 2:

Think about the bigger picture and you'll be in a good position, no matter what happens.

Speaker 1:

Great advice, and I think this is a good time to remind our listener that, while we've been talking about national policies and trends, the article also talked about how important local factors are.

Speaker 2:

Oh yeah, for sure.

Speaker 1:

Can you talk about that a little more? Why should our listener care about what's happening locally?

Speaker 2:

Because what's happening locally can be the most important thing. Think about it Things like zoning laws, local development plans, even the specific demographics of your area, can have a huge impact on supply and demand Right, which ultimately determines prices. What's happening in your city or town might be totally different from what's happening on the national level.

Speaker 1:

So even if Harris or Trump does everything they're planning, what happens in my own neighborhood could be totally different.

Speaker 2:

Exactly. National trends give you context, but the local market is where the real action is.

Speaker 1:

Okay.

Speaker 2:

Pay attention to what's happening in your community. Talk to local real estate agents and do your own research on things like zoning regulations and development projects in your area.

Speaker 1:

So it's all about looking at the big picture, but then also zooming in to see what's happening in your own backyard. Exactly it's about connecting those national and local pieces to make the best decisions. That makes a lot of sense. So it's not just about who wins the election or what the Fed decides. It's about understanding how those decisions will actually play out in your specific market.

Speaker 2:

Exactly it's about being a smart consumer, not just someone watching from the sidelines.

Speaker 1:

Exactly it's about being a smart consumer, not just someone watching from the sidelines. This has been super helpful. I feel like I have a much better idea of what to expect, or at least what questions to ask, as we head into this crazy year.

Speaker 2:

That's what we're here for. Knowledge is power, especially when it comes to something as important as your home.

Speaker 1:

I couldn't agree more. Well, folks, that's our deep dive into the 2025 housing market. Elections, the Fed, national policies, local factors it's a lot to handle, but hopefully this has given you the tools you need to navigate the housing market in 2025 and beyond.

Speaker 2:

Remember. The important thing is that while uncertainty is a part of life, especially during an election year, you need to focus on the long game. Don't make hasty decisions because you're scared or just guessing.

Speaker 1:

Great advice Think long term, do your research and don't forget to check out what's happening in your local market. Those are the keys to success, no matter what's going on in politics.

Speaker 2:

Yeah, that's a really good point and one that doesn't get talked about enough. The rental market is definitely connected to the housing market as a whole. Like, the rental market is definitely connected to the housing market as a whole. Like, if owning a home gets harder because prices or interest rates go up, more people will probably end up renting. That increases demand and could push rents up.

Speaker 1:

So what happens in one part of the market affects the other.

Speaker 2:

Exactly. If supply goes up and homeownership becomes more affordable, it could take some pressure off the rental market Makes sense. But if supply stays low or affordability gets worse, renters could end up paying more and have a harder time finding a place to live.

Speaker 1:

So for all the renters listening, this election and these policies could really impact you. Any other advice specifically for renters as we head into what could be a pretty wild year?

Speaker 2:

Well, knowledge is power right, Especially when it comes to renting Right. Stay informed about tenant rights and resources in your area, understand your rights as a renter, familiarize yourself with local laws about rent increases and evictions, and know where to go for help if you need it.

Speaker 1:

That's really good advice. It's easy to feel helpless when you're dealing with these big economic changes.

Speaker 2:

Yeah.

Speaker 1:

But knowing your rights and having the right resources can really make a difference.

Speaker 2:

For sure and remember, even when things are uncertain, there are always opportunities. Yeah, that's the point. Whether you're buying, selling or renting, staying informed and taking action can help you navigate the housing market and come out on top.

Speaker 1:

I like that Well, folks. That wraps up our deep dive into the 2025 housing market elections, the Fed, national policies, local factors it's been a lot to cover, but hopefully we've given you a good foundation for understanding what's going on and how to make smart decisions.

Speaker 2:

As always, the key is to stay curious, keep learning and don't be afraid to ask questions. The housing market is always changing, and the better you understand it, the better prepared you'll be.

Speaker 1:

Couldn't agree more. Thanks for joining us on the Deep Dive everyone.

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David (Viacheslav) Davidenko

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