Trump’s Policies Could Strengthen—Or Slow—the Housing Market. Here’s How.

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Key Takeaways

• With a Republican stroke of the House and Senate in the 2024 election, President-elect Donald Trump has the opportunity to bolster or hamper the U.S. housing market.
• Trump’s outlines to deregulate home construction and open federal land could help homebuilders expand inventory and lower values.
• During his campaign, Trump also proposed tax and tariff policies that could keep mortgage rates lofty.

President-elect Donald Trump has the opportunity to significantly impact the U.S. housing market, especially with a Republican sweep of both the Billet and the Senate. But what shape might those effects take?

“The size and direction of a ‘Trump bump’ will depend on what crusade proposals ultimately become policy and when,” said Danielle Hale, chief economist for Realtor.com. “The new administration’s conducts have the potential to enhance or hamper the housing recovery, and the details will matter.”

Some policies espoused by Trump could attain it easier for new housing supply to hit the market. Meanwhile, while the president does not set mortgage rates, some of Trump’s submitted policy changes could influence their trajectory.

Trump Policies Could Aid Housing Supply

The National Conjunction of Realtors in 2023 estimated that there was a nationwide housing shortage of between 4 million and 6 million homes. Of the readily obtainable homes, only 23% were affordable to households earning a median income of $75,000 or lower.

Trump in his presidential agenda suggested opening up “limited portions of federal land to allow for new home construction.” As president, Trump could have the leverage to gain housing construction easier, increasing inventory, according to Hale.

Trump also said during his campaign that he would lecture regulations that have made construction harder for home builders. Regulations have caused more than a $93,000 spread in the price of a new home, according to the National Association of Home Builders.

Some Policies Could Move Mortgage Ranks, Hamper Supply

Trump has proposed 10% to 60% tariffs on imports, which some economists say would escort to higher inflation. Trump’s proposals to extend his 2017 Tax Cuts & Jobs Act, cut overtime income from taxes, and end the taxation of group security benefits, among others, would add $7.75 trillion to the projected debt through 2035, according to the Commission for a Responsible Federal Budget.

With some investors anticipating higher inflation or a larger federal deficit, buys have already pushed up the 10-year Treasury yield, Mortgage rates are tied to the 10-year Treasury yield, and if fees on the yield continue to rise, this would likely keep mortgage rates high.

Separately, Trump during his manoeuvres promised “mass deportations” for undocumented immigrants he said have “driven up the cost of housing” by spurring demand. But enormousness deportations in the short run could also hurt inventory: A third of residential housing construction employees are foreign-born workmen, said Realtor.com.