The first week of January is generally a quiet time for housing and for policymakers in Washington DC, even in a year of transition, despite superficial obligations to certify elections, plan inaugurations, and swear in new members of Congress , this generally goes without incident. 2021 is an entirely different scenario, and today’s Georgia news will have a significant impact on President-elect Biden’s housing program.
Attempts to undermine the already confirmed electoral college have brought armed protesters to Washington and literally divide Lincoln’s party between those willing to fall on their swords for the president and those who see challenging this process as too much of a constitutional bridge. far.
No matter where you are, it reminds you of that song by Glenn Frey so apt for this cold January, “The Heat Is On”.
But that first week also added “Georgia on my mind” to the songbook with Georgia’s second-round races. The stakes are high. With both Georgia Senate seats going to the Democrats, the Senate is tied 50 to 50 with the Vice President entering as the deciding vote.
This result would place majority leadership in the hands of New York Senator Chuck Schumer and create a significant opportunity for President-elect Biden to implement many other aspects of his agenda – with potentially significant impacts on housing and mortgages.
As it now looks like the two winners in Georgia will be the Democratic candidates, the whole playing field is changing. Let’s be clear though, a majority of one vote via a Harris vote is not enough to do aggressively progressive acts.
With many moderate Democrats in the Senate, the only way to get an agenda right is to keep the whole party as one voting bloc. With several Democratic senators coming from Red States, they cannot risk being too progressive and that will act as governor to prevent policies from going too far to the left.
But there are several things that can happen. Here are some key possibilities:
- A bigger Recovery plan would be more than likely to pass and could include the infamous $ 2,000 to individuals and more support to states and small businesses. Several analysts have already released research today increasing the GDP forecast for 2021. Macropolicy Perspectives said today, “GDP is expected to grow at a rate above 4% in 2021 and above 3.5% in 2022. After the adoption of the 900 billion dollar package but before Georgia, we expected 3.6% and 3.0%. The general consensus is that Georgia’s outcome will translate into more stimulus for an economy that needs to grow.
- Presidential appointments will be confirmed more quickly. Since the Senate majority will now be Democrats, the calendar is managed by Senator Schumer, which will facilitate much faster confirmations to support the President for key roles at Treasury, HUD, CFPB, and more.
- To that end, Sen. Sherrod Brown, D-Ohio, will likely be the new chairman of the powerful Senate Banking Committee, which could lead to further scrutiny of big banks and their CEOs.
- President-elect Biden’s housing program includes a proposal for $ 15,000 tax credit for the purchase of a first home. As this total amount can pass through the legislative process, the chances of getting some form of tax credit for the purchase of a home will now be much higher, which will stimulate the real estate economy even more. And while inventories may be low, builders will certainly strive to build as many new homes as possible in order to take advantage of the potential income from this new pool of buyers, which will likely lead to increased sales of new homes. especially in the second semester. .
- Other stimulus you might expect would include student loan forgiveness, improvements to the affordable care law, increased Medicare eligibility grants, and “green” care-focused legislation.
- The tax bill passed under the Trump administration will likely be overhauled, which will lead to an increase in the corporate tax rate and the elimination of certain benefits granted to high-income earners.
- Finally, the steps to confirm the judges preferred by the new president will have a higher probability of being voted on. It is an advantage of the fact that the majority is in power.
There will certainly be other areas of interest including GSEs, ARC, etc., but the key elements affecting housing and mortgage finance will be seen in the points above.
The bottom line is this: A single vote majority means a limited ability to overreach progressive goals like Sen. Elizabeth Warren and Rep. Alexandria Ocasio-Cortez, but it helps accelerate the new president’s ability to build his own. administration and implement some of the efforts that even some moderate Republicans have supported.
While political divisions have polarized much of America, housing and mortgage financing has always been seen as essentially non-political, and the ability to forge broad coalitions between the two sides has a better chance of success than of success. many other issues that the next Congress and the President will face.