Blog with MAE Capital

It has almost been 2 months since the new administration has been in office and I have never seen administration move so quickly toward changing just about everything.  Many people are freaking out over the changes, mostly the politicians who have had non-profit organizations set up to funnel money back to them become unfunded.  The amount of fraud that is being uncovered is astronomical and the savings for average Americans will end up being tremendous.  Some of the economic changes that are happening are being overshadowed by the DOGE and other geopolitical goings on in the world.  This article is not to give praise for the changes but to recognize them and see how it is going to impact the Real Estate and Mortgage markets moving into the future.

Tariffs and the impact on the Real Estate markets are going to be minimal in the short term.  Tariffs are a way to encourage investment in the United States and bring back manufacturing and jobs to the US.  This is a long-term game where the positive impacts will not be for several years.  A Tariff is basically a tax on goods that are being imported into the US.   This may sound like it will be inflationary as those goods being imported will be delivered at a higher price.   In the short run, it will be, but in the long run, you will see companies coming back into the US and the supply of those goods will increase, and when supply increases prices go down.  The other effects of tariffs in the long could be that the US will not need to tax its citizens as much to keep a viable government and the possibility of doing away with income tax could be a real possibility along with other factors in the economy.    With more jobs in the US, as a result of tariffs, people will feel more financially secure and will buy more homes.

 The re-adjusting of government by making it significantly smaller more manageable and more accountable will also help with lowering taxation on its citizens which will mean more disposable income for every American.   With more income people will be able to qualify more easily to buy a home.  In addition to smaller government regulations will be lifted on tapping America’s own resources such as oil, natural gas, and rare earth minerals.  This will bring down the cost of fuel that delivers goods to the markets thus making food prices more affordable.  The government has also put into place a Cryptocurrency reserve which will give the government its assets and can begin to build the net worth of the federal government so our currency will have more value.  In addition to the adoption by the governments of the use of Cryptocurrency will close the loophole that is being exploited as seen in the waste and fraud that DOGE is uncovering under a strict ledger system all monies could be easily tracked on the blockchain.   

This Blockchain technology has far-reaching implications that will eventually change the way just about everything in the financial world is done.  Couple Blockchain technology with Artificial Intelligence (AI) and we are going to see astronomical changes in the financial world.  This will mean a faster underwriting system for the mortgage business and could take the loan officer out of the equation as a consumer will be able to give access to a Bank or a financial institution to check personal information.  AI could then get all the necessary information on a borrower in a matter of seconds and have the borrower’s risk underwritten in seconds making the process of getting a mortgage almost instant.  Coupled with Blockchain the entire transaction is permanently recorded forever and can be analyzed far into the future.  AI and Blockchain are also poised to take over the banking system as well as Wall Street and all financial functions.    

These changes are coming, it is only a matter of time before we start to see big changes.  People that have a problem with change had better buckle up it is going to happen at a faster speed than we have ever seen.   All the changes that the new administration is making will take time for all of us to feel, but we will feel it.  I do see the economy having to go through an adjustment period, or correction, or recession whatever you want to call it, but it will be better to go through sooner than later.  The positives that come from a recession are lower interest rates, lower cost of money, and a correction in housing prices, it will give the administration an opportunity to change the entire financial system, which I have heard.  Although I can’t predict the future what I can tell you is that the changes will be coming at a faster pace than we have ever seen.   As the changes happen, they will hurt and heal so be patient you can’t change major things in a few weeks it is going to take years.