It’s not often that you hear that The President is making money off of real estate — especially in office. However, President Trump is — but not in the way we might think.
The executive order
In today’s world, buying a home is hard. For first-time buyers, usually a home is around $440,000, interest rates have increased over 6.5% and inventory is scarce. First-time home buyers make an average of $70,000 to $80,000 annually. Additionally, home sellers demand larger down payments, often times averaging over $100,000. These factors call for a high income that most first-time buyers don’t have, making affordability difficult.
Earlier this month, President Trump signed an Executive Order “Stopping Wall Street from Competing with Main Street Homebuyers,” limiting institutional buyers from purchasing single-family homes and working to make housing affordable for families.
Policies for profit
But how exactly is the President making profit off of real estate? It might sound simple but it’s not. President Trump has profited from global licensing deals –meaning he’s earning fees by putting his name on luxury buildings like resorts, hotels, and towers, including golf courses rather than through direct development of residential homes.
The Trump administration has fueled the market through federal actions to boost accessibility to authorize financial companies like Fannie Mae and Freddie Mac to purchase more than $200 billion dollars in mortgage-backed securities at lower rates. The administration is aiming to pursue policies towards large institutional investors while allowing certain build-to-rent projects from these bans, which could impact the market.
In addition, Trump has been pursuing policies to limit large corporate investors from buying family homes with his income streams aiming towards licensing and cryptocurrency ventures. Trump has licensed his name for projects in foreign countries such as Saudi Arabia, Oman, India and Vietnam.
How profit is accumlated
While some of his policies are taking effect, this puts a restriction on institutional investors, including the exception of “build-to-rent” projects, allowing institutional investors to collaborate with builders to build new neighborhoods. This policy grants for potential revenue in the thriving “build-to-rent” sector.
As a result, these policies are working towards reducing the prices of loans, taxes, fees, and insurance prices to make homeownership more affordable for the middle class and first-time buyers.
