WOW!   Election over…not what most of us were expecting, I am sure.   Those of you who are friends with me on Facebook on my personal page, know my feelings on the subject for better or for worse .   YIKES!      But I’m not here to write about the election so much, or even how I feel about it -but to discuss a bit of what Mr. Trump’s election might mean for the housing market in our area and nationally.

As I mentioned in my previous blog post that you all received/read, the St. Louis market is very affordable compared to markets nationally.  The President of CBG in St. Louis spoke to us recently about the stats both nationally and here.    National home ownership is at a 50 year low of 64%…this in part due to the housing crash and folks having credit scores adversely affected.   In the St. Louis area, home ownership is at 72% due much to our affordability indexes.   Even millennials have higher home ownership rates here than nationally (STL: 47%   Nationally:  42%)  Per Realtor.com

So if you are thinking of buying or selling or both…our area is ahead of the national averages overall.   With the upset election of Mr. Trump we will probably begin to see a gradual increase in interest rates.   Originally, the rates were projected to stay lower due to the Brexit affect on markets etc.    Depends on which outfit you get your info from but National Association of Realtors predicts interest rates at 4.5% by end of year 2017 (this was before the election).    This is about a percent higher than what we have now – again depending on loan type.   However, it is still a historically low rate!   My first home the interest rate was 10% and this was a bargain after the late 1970’s rates that were 15-20%!!  I always try to put some perspective on this when the subject comes up!

This rise in interest rates is something to consider if you are planning to purchase a home or upsize etc.   A 1% increase in the rate reduces purchasing power by 11%!   Lesson:  NOW IS THE TIME TO ACT!   We’ve also been hearing that Mr. Trump’s election will mean the repeal/amending of Dodd Frank and that may mean some changes in Consumer Financial Protection Bureau which affects lending.    We shall see.

Since Trump’ election, the markets have not dropped as predicted and many are optimistic about the overall outlook for the market – including housing.    We are hopeful in the industry!   One sticking point has been credit rates which have kept many from entering the home buying market.   The average credit score for millennials is below 670.   FHA loans are lending at an average of  680 and conventional loans at 790!   The millennials score of below 670 would explain the lower home ownership rates for that group.   But even older folks who have suffered job loss/housing bubble would have credit rating affected making it harder to get a home loan.  Perhaps with a president who is apt to be less regulatory in his policies this will help.   Time will tell.

So as always, stay calm, take of yourselves and your families and if you or someone you know is in need of professional real estate guidance, please let me know!