interest rates stabilized after the post- Brexit rally. The recent Treasury sell-off raises the possibility that the 40-year secular decline in mortgage rates may finally be at an end. If that turns out to be the case, originations will drop sharply, refinances will dry up, durations will extend, and home sales activity will grind lower. Weiss: The wild card in this story of home buying mania is the risk of bumps in the road as we transition to the new administration of President Trump. Things may go quite smoothly but many approaches will be different, more different than any transition that I can remember. Changes may cause a boom in the economy, high employment, and modest inflation or they may cause trade wars, a recession and any number of unnerving international tensions and risks. Markets hate uncertainty and risk. Economies hate what markets hate. If things go in that direction, then you can ignore everything I said above. What are the odds we end up in such a fog? I am an optimist by nature and I think the odds are low. I think most homes will be more valuable in a year than they are now and most people who bought a home within the next year — with a 30 year mortgage — will find that they made a good decision.

state incentives that could limit regulations and possibly encourage additional lending to builders. As around 25 percent of the cost of a home is “regulation,” any change in this will certainly help builders and also consumers. regulations surrounding the mortgage lending industry, the new presidential administration will certainly have its hands full from the start. At minimum, there will be a degree of uncertainty by all corners of the market, especially with consumers, that will likely lead to more of the ‘wait and see’ approach that has limited active engagement from many sectors of the traditional home buying demographic. At the end of the day, the overall impact to the U.S. residential real estate market will largely be tied to performance of the rest of the economy. Though early Villacorta: With promises to reform tax code, immigration policy, and

reads of consumer confidence suggest a positive expectation to the incoming administration, that optimism will have to reinforced by increases in wages and housing affordability before meaningful impacts will be felt in a housing market that is still struggling to find firm footing eight years removed from the height of the housing crash. Becketti: At this moment, discussion of the new Administration’s proposals and of their likely fate in Congress is triggering increased uncertainty among investors. Markets appear to believe that the proposals, in whatever form they are finally enacted, will generate a moderate increase in both growth and inflation, and we agree with that consensus. Benchmark interest rates already have jumped to price in that expectation.

However, even before the U.S. presidential election, mortgage originations had begun to cool as

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