Amy Crews Cutts, Chief Economist for Equifax Inc., is a recognized industry expert with over 17 years of economic analysis and policy development experience. Cutts recently spoke with DS News about what she foresees for the future of the housing market post the 2016 presidential election.
When asked how will the upcoming 2016 presidential election will affect the housing market as well as what the housing market and mortgage industry will look like post Obama administration, Cutts says that she can speak only looking at past presidential elections but on that basis thinking about what happened in the past.
“One thing that characterizes the United States and obviously many of our friends in the western, industrialized world is an easy transfer of power,” says Cutts. “One president goes on and the next president goes in and the democratic process works. The lights from one account goes off and then they pull a switch and all the accounts are active under the new regime.”
Cutts shares that from the perspective of the American consumer nothing happens at the point of the new administration taking office; business is as usually from one day to the next. Cutts notes that very little should happen in terms of funding and the financial market.
“Where potential issues arise and where we might argue that there will be fundamental differences is when administration moves in tries to change policy,” says Cutts.
She says the first thing the new administration must do upon taking office is put a new cabinet together. Once that is complete, then the next thing that must be done is the cabinet must start to think about what rules they want to write and then start creating them.
“Now we are a year in to a new presidential administration before any of those changes really take place,” says Cutts.
It's easier when the same party stays in place, according to Cutts, because in many causes the same deputies will stay on until they are replaced and the process as a whole is a little more orderly. The issue comes when their is a change in party. Cutts says this is when a lot of house cleaning happens because those on the previous cabinet don't want to work for the new party.
“An orderly transformation of power means that the FHA rules will stay the same, the Fannie Mae and Freddie Mac rules will stay the same, the Wall Street Rules will stay the same up until the time that the new administration, whoever that may be, comes in and starts to make their mark on policy,” says Cutts. “But that is a year or two in.”
Cutts remarks that outside of those issues, the only response you are going to see is whether the market is happy with the choice or unhappy with the choice. She says in the case that the market is unhappy, that is where volatility in the registry may be seen.