Homebuilders Perk Up After Trump’s Election | Global News Avenue

U.S. homebuilders are becoming more optimistic about the future in November after the Republican Party swept the election.

The National Association of Home Builders (NAHB) said on Monday that an index measuring homebuilder optimism rose to its highest level since April. The NAHB/Wells Fargo National Housing Market Index rose to 46 from 43 in October, but remained below the 50 level, indicating that builders are generally optimistic about the market. The index measuring prospects for the next six months rose to 64 from 57 in October, the highest level since April 2022.

Economists say optimism is running high as President-elect Donald Trump’s decisive victory removes any electoral uncertainty. Ahead of November 5, future tax policy is clouded Attract potential home buyers put off. Republican sweep of Congress and White House almost certain Trump’s 2017 tax cutsMany of these provisions are due to expire in 2025 and will be extended, making possible pay higher taxes Under the leadership of Democrat Kamala Harris.

“This newfound optimism may reflect hopes that upper-income households will move forward with home-buying plans, as provisions of the 2017 Tax Cuts and Jobs Act look set to be fully extended by the end of next year, and share prices are set to rise,” said Pantheon Macroeconomics Chief U.S. Economist Samuel Toombs wrote in a commentary:

The index is based on a survey of builders, who were asked to rate current sales, six-month prospects and customer traffic.

While the prospect of tax cuts could boost the housing market, some of Trump’s policies could have the opposite effect in the long run. Home builders have Fear of mass evictions Construction labor may be depleted. Economists also predict that Trump’s proposed tariffs could push up inflation, causing the Federal Reserve to keep interest rates higher for longer. Upward pressure on mortgage rates.

According to Freddie Mac, the average interest rate on a 30-year mortgage has risen to 6.78% from 6.08% at the end of September as financial markets anticipate and react to Trump’s victory. High mortgage rates have depressed the housing market over the past few years as homeowners are unwilling to sell their homes or give up the low-cost mortgages they obtained when interest rates were at their lowest during the pandemic.