It has been a very interesting election for the United States and with all the projection we are quite sure that former Vice President Joe Biden will indeed be the 46th President. It also looks like the Republicans will hold the Senate, and the Democrats will still have the majority of the House of Representatives. With this being said, what is the future of mortgage and other under the Biden Administration? Let us take a quick look.
The General Perception with Biden and Future Mortgage Policies
We have asked our Twitter followers of their perceived effect of the win of former Vice President Joe Biden and about 40% of them believes that he will boost the mortgage industry. Whether it will happen or not is still to be seen.
— HMAC | 🏘 We are Looking for Mortgage Partners (@joinhomemac) November 7, 2020
The number of homeowners who are participating in forbearance plans has been dwindling as the months go by. As more homeowners regain employment and more jobs are added to the economy, more people are getting out of forbearance. Under the Biden administration, an extension of forbearance plans is very likely. The housing market has been a critical sector during this recovery from COVID-19 lows.
Student debt is one of the major concerns for homeownership. It will likely be one of the talking points for the Biden administration as well. According to reports, democratic leadership will ask Biden to write an executive order to write off up to $50,000 of student debt per debt holder. The catch here, however, according to Housing Wire is that the funding for this write-off program will just be added to the deficit.
If there is one thing that would probably be on hold is GSE conservatorship. One of the great economic successes during the COVID-19 crisis was that credit never got tight, and the lending market remained stable in America. Added to this, the government-backed forbearance plans allowed distressed homeowners to stay in their homes, which stabilized the market. Democrats had long been against the privatization of these institutions.
The housing market continues to be one of the most successful even during the COVID-19 pandemic. We expect that this success will continue through 2021. As for mortgage rates, however, let us expect a slow rise in interest rates once we get back to the “new normal.” As for housing affordability, we are expecting that the Biden administration will find ways to make housing more affordable and enact new policies to back it up.
Do you have more ideas on what the Biden administration will do for the mortgage industry and housing market? Let us know in the comments below.
Source: “With Biden win, the future of forbearance and student loans” – HousingWire