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Will Donald Trump be good or bad for the housing market? It is far too early to say, but ultimately, it may depend on what side of the housing transaction you find yourself. So far, indications are that the Trump years may produce a more conservative market for home loans, especially for those with fewer resources and lower down-payment money.
Within hours of his inauguration, President Trump suspended a late order by the Obama administration that would have cut mortgage insurance premiums for Federal Housing Administration (FHA) loans – a move that should disproportionately affect lower-income borrowers as they are more likely to seek FHA loans with low down payments.
Predictably, FHA loan applications had increased in anticipation of the cut and dropped sharply after Trump's suspension of the cut. The week after the cut was reversed, mortgage applications fell by 3.2% from the previous week and FHA applications dropped by 13%. FHA refinancing applications were hit particularly hard, dropping by over 25%.