Photo: Gage Skidmore/Flickr
Over the last year, some drivers of the US economy received an unexpected boost following the surprising results of last year’s Presidential election. This phenomenon has been dubbed the “Trump Bump.”
However, unlike the stock market which is performing at record high levels, the US housing market has not seen a “Trump Bump,” according to a recent report by the listing site Trulia.
To compare how the US housing market has fared thus far under Trump compared to its performance during Obama’s second term, Trulia created a housing market index around five key market indicators using data from the research firm Moody’s Analytics.
Of the 3,087 US counties studied, housing markets in just 1,021 counties have improved over the last year, while 1,299 are performing “at least slightly worse.”
On average, the number of residential building permits has increased during Trump’s first year in the White House compared to annual averages recorded under President Obama. However, the value of those permits have gone down.
Some 1,924 counties, or 62 percent, are currently on pace to perform better in 2017 than their 2013 to 2016 annual average. But, only 33 percent of counties are on pace to have a higher permit valuation this year compared to the Obama years.
Annual home price appreciation has been greater in 51 percent of counties under Trump, but only 26 percent of counties recorder greater rent appreciation under Trump compared to Obama.
Lastly, the vacancy rate recorded greater decreases under Trump in 52 percent of counties.
In terms of red counties (Republican) versus blue counties (Democrat), blue counties are performing better when it comes to new construction levels, but permit valuation, home values and rents are softening.
During Trump’s first year in office, the number of building permits in blue counties have seen a 19.6 percent increase compared to the Obama years. Meantime, the value of residential building permits have decreased by 4 percent under Trump.
Home values and rents in blue counties are 1.4 points and 2.5 points lower so far under Trump compared to Obama, respectively,.
But despite an uptick in the number of residential permits issued, red counties are also recording decreases in permit valuation (3.3 percent), home values (0.2 points) and rents (2.6 points).
Despite the lack of a “Trump Bump” in the housing market, the overall housing market is a mixed bag and depends greatly on your position in it — homebuyer or seller.
Cooling rents and home prices might not be great for property owners, but renters trying to save for a downpayment might reap the benefits of the market’s softening so far under Trump.
“Signs that housing is cooling under Trump is likely more of a reflection of where the housing market is relative to the economic cycle,” says Trulia, in the report.
And an increase in new construction is certainly welcome news as the national market faces historic low levels of housing inventory.
To create its housing market index, Trulia measured the housing market’s performance in five drivers, including price, number of permits filed and the valuation of permits.
The index ranged from a score of 5, where the housing market has performed better on all five indicators under Trump, to negative five, which indicates that the market performed better under Obama.
Trulia then summed up the total points, with a score of one, three or five indicating the market performed slightly better, better, or much better under Trump, while negative values indicated the market performed better under Obama.
Click here to read the entire report.