The votes have been counted (well, they're almost done in Florida!), the confetti has been swept up, and Barack Obama has secured another four years as President of the United States.
So, what does this mean for the nation's housing market? If you're a homeowner -- or thinking of becoming a homeowner sometime in the near future -- what does the win mean for you? Despite a late-night celebration by Obama supporters, it's important to keep the current economic situation in mind: (September home sales hit a 2 year high)
- The nation's unemployment rate is still hovering around 8%, and we've seen that the housing market is directly tied to the jobs market.
- The U.S.. dollar grew weaker on Tuesday night, as word of Obama's reelection spread. Right now, economic experts say that's a sign that the uncertainty has been lifted, and world markets are selling more of their stocks. In the long run, though, no one knows for sure how a weak U.S.. dollar is going to affect the world markets -- and, in turn, how the world markets are going to affect our economy here at home.
- America's economy is currently growing at a rate of 2%. In light of what we've been through the past few years, any growth is a welcome relief. However, that growth rate is still far below what it should be.
- Mortgage rates are still incredibly low (According to Freddie Mac, the average rate on a fixed 30-year mortgage was 3.39% on Election Day). That's a good incentive to encourage people to take the plunge and buy a home, but it's also a sign that the U.S.. economy is not nearly as healthy as it should be. (How does the government affect your mortgage?)
Surprisingly, though, the biggest news on the housing market front after the 2012 election is that there isn't much! After all, President Obama was responsible for most of the regulations that took effect after the housing bubble burst -- the biggest being the Dodd-Frank Act that created hundreds of new rules for lenders. Republican challenger Mitt Romney had talked about doing away with many of the regulations that lenders are dealing with, but that will not happen now. Additionally, the Federal Reserve will be able to move forward with its Quantitative Easing plan. Back in September, Fed Chairman Ben Bernanke announced that the Fed was going to buy $40 billion worth of bonds each month for an indefinite amount of time, in an effort to keep interest rates low and, hopefully, encourage Americans to make big purchases (like houses). Had Romney been elected, he said he would not have reappointed Bernanke when his term expired in 2014. In the meantime, who knows what would have happened to the Quantitative Easing plan?
Perhaps the biggest question after the 2012 election is how President Obama will work with Congress -- and how bipartisan efforts (or a lack thereof) will affect the housing market. Republicans maintained control of the House of Representatives on Tuesday night, while Democrats maintained control of the Senate -- meaning that the set-up on Capitol Hill will not change one bit. However, if Washington's leaders cannot get a budget finalized by the end of the year, the Bush Tax Cuts will expire, and Americans will head closer to what experts are calling a "fiscal cliff" -- and serious risk for another recession in 2013. So, will all of the partisan bickering continue to get in the way? Or, will the two parties be able to put their differences aside and work out some compromises? The future of the housing market could depend on it!
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