Trump’s economic policies like tariffs and mass deportations are likely to weaken the broader economy while pushing inflation and interest rates higher.
That is according to Jacob Channel, senior economist at lender marketplace Lending Tree.
He reckoned mortgage rates will remain relatively steep and erratic – in fact they could climb higher than current levels.
This is because the Federal Reserve may have to stop cutting interest rates, as Trump’s policies could stoke inflation.
Indeed, If Trump goes through with his economic policies, year-over-year inflation growth could climb to 3% or 4% over the year — and perhaps even higher in 2026 and beyond.
Mortgage demand is expected to remain stagnant, meaning house prices should see minor rises.
Channel said policies such as mass deportations could make it considerably more difficult and expensive for builders to construct homes, which means fewer will be built.
Tax cuts could stimulate growth in the short-term, but in the long-term the disruption caused by tariffs and mass deportations will likely cause the economy to slump.
That means that, even if a recession is avoided in 2025, it’s likely in 2026 and beyond.
Trump will be inaugurated on January 20, 2025.