Doug Bauer, chief executive of publicly traded homebuilder Tri Pointe Homes, expects "a pretty robust spring selling season" after what feels like two years of depressed existing home sales -- and, more recently, hesitation among buyers and sellers amid mortgage rate volatility before the presidential election.
In an interview with CNBC yesterday, Bauer explained that the demand for homes is there. Everyone wants a place to live, after all; the issue is supply. The incoming administration could mean good things for the housing world, in his mind: from corporate taxes, to regulation, to mass deportation. Still, a lot of what hampers building comes from land-use control at the state and local level, particularly in high cost-of-living states such as California.
There are a lot of unknowns, Bauer explained -- and yet there is one thing we can expect, and that has to do with the corporate tax rate. "The corporate tax rate is going to remain flat, or go down," he said. "So, that's a positive."
Then there's regulation. Republicans and deregulation are almost always inseparable, so another Donald Trump presidency could give rise to those leanings. Specifically, Bauer thinks there'll be reform among multiple governmental agencies, from the Department of Housing and Urban Development to those catering to energy and the environment. It is possible that reform, via a loosening regulatory environment, might actually be banked on as a product of the first-ever Department of Government Efficiency -- run by none other than the world's richest man, Elon Musk, and former Republican presidential candidate Vivek Ramaswamy.
Bauer said that "the financial markets and the banks are going to deal with a lot less regulation. The economic windfall from that, as you see, the banks are more encouraged to put dollars into all businesses, especially the land and land development business, to small, medium-sized builders."
While public builders don't have much of an issue with financing, he said, "opening the financial spigot will help the industry as a whole." Plus, we might see more mergers and acquisitions, which some say can be beneficial for real estate companies.
Either way, it isn't only Bauer and Tri Pointe Homes that appear to have a rosier outlook for next year, whether it has to do with another Trump presidency or not. UWM Holdings, parent company of United Wholesale Mortgage, announced in its third-quarter results that it was positioning for a refinance boom. The company's refinance volume rose in the quarter to $13.3 billion, up from $6.5 billion in the previous quarter, portending an upswing in momentum in the refinance market, even with higher interest rates on the table. Chairman and chief executive Mat Ishbia was bullish on the results and said the firm was poised to capitalize on a refinance surge when it "inevitably" arrives.