President Donald Trump is eager to show voters he is making housing more affordable. But even some allies acknowledge that the chances of his policies having a meaningful impact before Election Day are slim.
Over the past few months, with affordability clearly set to be a central theme in the midterm elections, the White House has unveiled a series of proposals aimed at addressing high housing prices.
Trump administration Instructing government-controlled mortgage finance institutions to purchase Billions of dollars in securities to lower mortgage rates. president Signs executive order to block institutional investors Government support for buying single-family homes as investments has pushed up home prices for individual buyers. And the White House Floating, eventually retreatinga proposal for a 50-year mortgage.
But economists say these policies, even if they reduce costs, will have a minimal impact at best.
“I don’t think there’s any silver bullet — certainly not in the next 10 months,” said Mark Zandi, chief economist at Moody’s Analytics. “The proposals that have been put forward are really on the fringe. They’re not really going to move the dial to any meaningful degree.”
Against this backdrop, some White House allies acknowledge that what they face in the coming months is less a policy battle than an information campaign. The challenge for the president, they say, is to show voters through his housing policies that he feels their pain — even if he can’t significantly reduce housing costs in the short term.
“I don’t think this is going to solve the affordability problem,” said a person close to the White House who spoke on the condition of anonymity to speak candidly about the administration’s housing agenda. “Moving the housing market is like turning around a supertanker. It’s not easy.”
“But,” the person added, referring to the government’s housing policy, “it’s important to show that you care.”
The House passed a bipartisan bill Monday night that expands access to home loans, streamlines environmental reviews for some home construction and creates voluntary zoning guidelines for local governments to facilitate housing construction. The Senate passed a version in the fall, and the president supported the package.
But there are major differences between the House and Senate versions, such as provisions in the House bill to deregulate community banks that could face opposition from Senate Democrats. The White House is also pushing for an amendment to codify its executive order on institutional investors, but Republicans are not enthusiastic about it. These tension points will make it more difficult to reach consensus and get it to Trump’s desk.
Economists stress that it will take a long time for even the best policies to have a material impact on the $55 trillion housing market. They added that problems created over decades would not be solved overnight. According to statistics, the current national median price of a single-family home is five times the median household income. Harvard University Joint Center for Housing StudiesBy comparison, housing prices in the 1990s were roughly three times incomes.
But addressing an issue that is increasingly important to younger voters is a political imperative because the typical age of first-time homebuyers is now 40, a record high, according to analysis by the National Association of Realtors. Republican pollster Brent Buchanan said the president’s desire to make housing more affordable without lowering home prices doesn’t sit well with this group.
“It’s hard to get a message across to voters under 40 when the president says he wants housing prices to go up,” Buchanan said, adding that the president’s comments “infuriated younger voters.”
White House aides acknowledge that some policies will take time to take effect. But they believe voters will see the results before the November election, pointing to the continued interest rate cuts the president is pushing for, which could indirectly lower mortgage rates, in addition to overall efforts to boost wages, fight inflation and even free up housing stock through immigration enforcement efforts.
“We have taken and will continue to take substantial and substantive actions to improve housing affordability, especially for young people,” said a White House official who spoke on condition of anonymity to share the administration’s thinking. “These things take time. The real estate market is not a super liquid market.”
White House spokesman Davis Ingle said in a statement that the administration is “committed to exploring every tool possible for the American people.”
“President Trump’s successful and common-sense economic policies have made housing more affordable again by cutting red tape, lowering borrowing costs and creating an economy where incomes grow faster than housing costs,” Trump said. “Under President Trump’s leadership, more Americans will be able to realize the American dream of homeownership.”
So far, the White House appears primarily interested in policies that lure buyers into the existing market, such as lowering mortgage rates, rather than increasing the supply of housing, which would theoretically lower the average price of a home. But the effects of some of these policies are short-lived.
The 30-year fixed rate did fall when Trump directed Fannie Mae and Freddie Mac to buy $200 billion in mortgage-backed securities to lower mortgage rates, but quickly rebounded as markets panicked about the possibility of Trump invading Greenland.
Others failed to roll out, such as the president’s proposal to create 50-year mortgages, which would have helped homeowners make monthly payments but created more financial risks in the long run. Trump also seems to have given up a thought that allows People are dipping into retirement and college savings accounts to pay for down payments.
Federal Housing Finance Director Bill Pulte, who led the mortgage bond purchases on Trump’s behalf, disputed the notion that the administration faces a time crunch in addressing constituents’ housing costs.
“Contrary to what this article is trying to portray, mortgage affordability is at its highest level in four years after President Trump’s $200 billion in mortgage bond purchases lowered Biden’s sky-high mortgage rates,” Pulte told POLITICO.
Mortgage rates at three-year lows According to data Charged by the government-controlled home loan company Freddie Mac, these rates Still significantly elevated Compared to the situation before and after the COVID-19 pandemic.
Interest rates aren’t the only problem.
Housing experts say not enough new homes are being built, keeping prices high and potential buyers on the sidelines. According to statistics, the median price of a new home in October was $392,000 Census Bureauup from $331,000 in 2020.
according to June report of the White House Council of Economic AdvisersThe average number of new homes started each year has dropped from about 6,000 per million people in the two decades before the housing crash to just 3,000 since.
“That’s what’s frustrating: All you have to do is look at this, look at this, and say, ‘Oh, supply is a problem.’ ” … It’s not like advanced astrophysics,” said another person familiar with government housing policy conversations who spoke on the condition of anonymity to speak candidly about the approach. “We’ve been under construction for 18 years. They won’t do anything to significantly impact home prices now. “
While the most direct way to help buyers is to lower prices, this creates a political problem. Lowering home prices is sure to anger the millions of Americans who own homes and benefit from rising home values, a point Trump has made repeatedly in recent weeks, saying his goal is not to keep home prices down but to keep them up — increasing equity for homeowners.
However, White House aides argue that any action to drive down prices would curb supply and reduce incentives to build new homes, in addition to hurting younger homeowners who have purchased in recent years. They argue that policies aimed at lowering mortgage rates would not only benefit potential homebuyers, but also existing homebuyers looking to purchase new homes.
By contrast, lowering prices “could create a huge set of financial problems for the people we’re trying to help,” the White House official said.
Builders, meanwhile, complain about high insurance, financing costs, local regulatory burdens, tariffs and labor restrictions, some of which have been exacerbated by Trump’s immigration agenda.
They did, however, praise the administration’s deregulatory efforts to streamline environmental reviews, loosen fair housing enforcement and reduce compliance requirements for federally supported projects.
“The government’s deregulatory actions are critical,” said Jim Tobin, president and CEO of the National Association of Home Builders.
Some of the administration’s headline-grabbing ideas — like builders’ push to build 1 million rent-to-own “Trump Homes” — An idea reported by Bloomberg — remains more concepts than concrete policies, leaving even allies unsure of what impact it will have on the ground.
“A lot of the oxygen is being sucked into ideas that look promising at first glance but can have unintended consequences,” said Tobias Peter, senior fellow and co-director of the Housing Center at the American Enterprise Institute.
Still, Seth Appleton, president of the National Mortgage Insurer and a former top HUD official during Trump’s first term, thinks there will be some changes this year: changes to manufacturing home construction requirements that could increase supply; increased rebates that could help improve households’ financial situation; and additional supply that’s coming online in parts of the country.
“On a broad level, what’s happening now is definitely going to be felt this year,” Appleton said. “This is a year of opportunity for housing policy.”