Clinton/Trump Immigration Plans Will Influence Housing: Redfin

"Biggest sleeper" in election reaction may be how the next president’s immigration plan will affect real estate, Redfin chief economist Nela Richardson says in email to Bloomberg.

  • Cites:
    • 1 in 4 construction workers is foreign born
    • 40% of new home buyers will be from other countries in the next 10 years
    • Foreign buyers make up large share of buyers in coastal and luxury markets
  • Closed-door immigration policies from Donald Trump would have "chilling" long-term effect on housing
  • Both Hillary Clinton and Trump face "a lot of work to be done" in housing, with tackling "growing scarcity crisis" in affordable rental housing "first and foremost"
    • They’ll need to make sure "a person’s zip code" no longer determines economic mobility through large scale investments in infrastructure from "schools to sidewalks"
  • It’s also "time to untie housing’s biggest policy juggernaut - Fannie and Freddie - from the government purse strings"
  • "A modern, first-world housing policy" requires "no less than strong solutions," while neither candidate has completely addressed these issues and housing has been "MIA" from most election rhetoric
  • For elections predictions, look at income growth, which "lurched" forward last year, according to the Census
    • Any signs of income growth are good for Clinton, as the successor of Obama’s economic plan, bad for Trump, whose appeal rests in part as "trumpeter" of new policies bringing back income growth to the working class
  • S&P homebuilding (S15HOME) up as much as 2% to highest intraday since Oct. 25, led by IBP, MTH, KBH, PHM, CAA
  • Related:
    • Clinton 3 Points Ahead of Trump in Final Bloomberg National Poll
    • U.S. VOTE PREVIEW: Financial Cos. May Win With Clinton or Trump
    • Nov. 4, Elections Likely Delaying Construction Spending: CreditSights
    • Either Clinton or Trump Bullish for 2017 Housing: Cowen
      • Trump may have easier path to helping housing, as he doesn’t need to worry about progressive wing opposing helping bigger banks; Clinton also has incentive to help expand housing opportunity
    • Oct. 24, Citigroup cautiously optimistic on outlook for U.S. construction spending into 2017; cites bi-partisan support for infrastructure development in Washington, better public sector funding environment
      • Lists buy-rated beneficiaries of longer-extending construction upcycle: URI, ETN, HON, IR, ATKR, ACM, JEC, EXP, SUM
    • Oct. 20, Credit Suisse said higher chance of Clinton victory seems good for stocks with high international exposure, industrials; listed potential infrastructure winners: ETN, KMT, CAT, DE, MTW, OSK, ACM, FLR, JEC