Doug Bauer, chief executive of publicly traded homebuilder Tri Pointe Homes, expects “a pretty robust spring selling season” after what feels like two years of depressed existing home sales—and, more recently, hesitation among buyers and sellers amid mortgage rate volatility before the presidential election.
In an interview with CNBC yesterday, Bauer explained that the demand for homes is there. Everyone wants a place to live, after all; the issue is supply. The incoming administration could mean good things for the housing world, in his mind: from corporate taxes, to regulation, to mass deportation. Still, a lot of what hampers building comes from land-use control at the state and local level, particularly in high cost-of-living states such as California.
There are a lot of unknowns, Bauer explained—and yet there is one thing we can expect, and that has to do with the corporate tax rate. “The corporate tax rate is going to remain flat, or go down,” he said. “So, that’s a positive.”
Then there’s regulation. Republicans and deregulation are almost always inseparable, so another Donald Trump presidency could give rise to those leanings. Specifically, Bauer thinks there’ll be reform among multiple governmental agencies, from the Department of Housing and Urban Development to those catering to energy and the environment. It is possible that reform, via a loosening regulatory environment, might actually be banked on as a product of the first-ever Department of Government Efficiency—run by none other than the world’s richest man, Elon Musk, and former Republican presidential candidate Vivek Ramaswamy.
Bauer said that “the financial markets and the banks are going to deal with a lot less regulation. The economic windfall from that, as you see, the banks are more encouraged to put dollars into all businesses, especially the land and land development business, to small, medium-sized builders.”
While public builders don’t have much of an issue with financing, he said, “opening the financial spigot will help the industry as a whole.” Plus, we might see more mergers and acquisitions, which some say can be beneficial for real estate companies.
Either way, it isn’t only Bauer and Tri Pointe Homes that appear to have a rosier outlook for next year, whether it has to do with another Trump presidency or not. UWM Holdings, parent company of United Wholesale Mortgage, announced in its third-quarter results that it was positioning for a refinance boom. The company’s refinance volume rose in the quarter to $13.3 billion, up from $6.5 billion in the previous quarter, portending an upswing in momentum in the refinance market, even with higher interest rates on the table. Chairman and chief executive Mat Ishbia was bullish on the results and said the firm was poised to capitalize on a refinance surge when it “inevitably” arrives.
“Right now, UWM is so much better positioned than we were prior to the last refinance boom,” said Ishbia in a statement. “Simply put, our operational fitness is at an all-time high, and you'll only see us accelerate from here.”
Then there’s $27 billion Rocket Companies, which operates Rocket Mortgage, Rocket Loans, and Rocket Homes, which has a goal of increasing its refinance market share from 12% to 20% in 2027, the company announced this month. The company’s home equity loan volume rose 78% year over year, too; it offers home equity loans as an alternate route to refinancing.
Not to mention, Rocket’s chief executive officer Varun Krishna explained during the company’s most recent earnings call that it had identified “growth audiences” that could reshape the homebuying landscape: women heads of households, Hispanic buyers, and aging first-time buyers. “The economic influence of women will continue to surge, with women managing two-thirds of household wealth,” Krishna said, according to a transcript. “Our brand will evolve to meet these clients exactly where they are.”
To that end, the company reportedly purchased a new domain, Rocket.com, for $14 million. Krishna said during the call that it would “unveil the new Rocket brand identity” in February 2025. The company reportedly will also return to the Super Bowl in 2025. “The transformation began with our recent acquisition of Rocket.com, a site that will unify the homeownership experience across home search and mortgage,” said Krishna. “In the coming months, we will share a greater ambition with the country and establish a brand that represents the ability for our clients to own the elusive American Dream once more.”
Not all roses
But there is the matter of tariffs—Trump tariffs, really. When asked, Bauer said he thinks it is possible that tax cuts put in place before tariffs could actually offset any increase in prices for businesses and their margins. “I think there’s going to be a positive business and economic effect from this incoming administration,” he said.
Trump promised to carry out a mass deportation of undocumented immigrants while on the campaign trail, and as President-elect he confirmed he would declare a national emergency to do just that. There has been some concern as to the effect this would have on labor supply, and therefore the cost to build homes, and so forth. Baur again said there are a lot of unknowns, but he doesn’t seem to be anticipating a hit.
“I frankly think we really don't know the overall effect, and is it going to be focused more on criminals… I mean, whatever is done, I think it will be done lawfully,” he said. “As a larger builder, we’ve had no issues with the labor side of the equation this year. And frankly, as you look back on the Trump years, we had no issue with labor. So I think on the margin, it’s not going to be a big deal.”
Tri Pointe’s stock is up almost 173% in the past five years and 40% in the past year. Unlike the rest of the housing world, builders were mostly resilient; they offered mortgage-rate buydowns, cut prices, and even built smaller homes to counter the soaring rates, sky-high prices, and short supply that’s defined the market for some time—and could continue to.
Nov. 20, 2024: Due to an editing error, the story misstated Varun Krishna's title. He is the chief executive officer of Rocket Companies. The article has also been corrected to reflect Rocket Companies' goal of increasing its market share by 2027.
