Monthy Real Estate Newsletter for Salmon, ID and surrounding area of Lemhi County.
How a Trump Presidency Could Impact the Real Estate Market in 2025
While we have been collectively holding our breath leading up to the general election, we can now do some forecasting knowing that Former President Donald Trump will be taking up residence at 1600 Pennsylvania Ave on January 20th. With President-elect Donald Trump’s proposed policies, the U.S. real estate market could see some notable changes. Trump’s economic platform centers on deregulation, tax cuts and increased tariffs—each with significant implications for housing.
Mortgage Rates and Interest Cuts
Within 48 hours of election night, the Federal Reserve reduced the interest rate by 0.25 percentage points, indicating that inflation has somewhat cooled. Although the unemployment rate has improved and the general market conditions are slightly more favorable, the reality is, the Federal Reserve acknowledges that the U.S. economy is not out of the woods yet. As of now, the Federal Reserve is expected to conduct another reduction of 0.25 percentage points in December 2024 and another in early 2025. Economic forecasters suggest that the peak of the improved interest rates will be May/June of next year with a full percentage point down, estimating the borrowing rates to be around 5.0-5.75%, which is more favorable than where we were 12 months ago.
Housing Supply and Deregulation
Nationally, Trump’s inclination toward reducing regulations could benefit the real estate market by streamlining construction processes and potentially boosting housing inventory in underserved areas. This deregulation might spur new development in designated opportunity zones, which are areas targeted for economic rejuvenation, through tax incentives. Idaho’s rural areas, like Lemhi County, could see increased development interest as a result. However, with looser lending standards, more out-of-state investors might also enter the market, intensifying competition for available homes and affecting local affordability, which is already a problem for our area.
Tax Policies and Foreign Investment
Under a Trump administration, tax cuts are likely to continue from his previous administration. Experts at America Mortgages anticipate this could stimulate demand among investors and foreign buyers. Foreign investors seeking favorable tax treatment and lower regulatory barriers may drive up demand, particularly in markets with high investment appeal. For Idaho, which is experiencing a tight housing supply, this might lead to further price increases, particularly in desirable areas. Locally over the last 2 years, we’ve seen our housing market significantly slow for everything above $450,000, causing the time on market to lengthen and sales prices lower. Conversely, the market for homes below $350,000 is still very active and competitive. It is not uncommon to see multiple offers on homes below $300,000 and the average time on market is less than 30 days (from listing to accepted offer). If demand increases, we can expect housing prices to increase as a result.
Local Market Outlook
Trump’s anticipated economic policies combined with the Federal Reserves anticipated borrowing rate decreases could open opportunities for buyers to find an affordable property that suits their needs. However, an increase in demand due to competitive pressures from out of state buyers remains a concern since 2021. The reality is, we are still seeing the migration effect of new residents coming from Washington, Oregon, California, Texas, Utah and Colorado. If those pressures remain at bay, our local buyers have a better chance of securing properties at a more reasonable price.
My name is Nikki Schuler, and I’m a licensed Associate Broker in the state of Idaho. My business has been built upon hard work, market knowledge & reliability. I pride myself on educating all potential clients, providing unparalleled service & listening to their objectives to determine a course of action. I always match clients’ motivation & put their needs before my own.