The Truth About Trump’s Housing Proposals: Realtor’s Insights
A second presidency of Donald Trump will definitely happen affect the housing marketbut the question is how exactly? While much is speculation, we can look at his past policies and campaign promises to get a better idea of ​​what maybe it happened. For example, Trump has talked about lower mortgage ratesbut for prices up to down to 3%there will have to be a serious economic downturn – something that no one wants.
Throughout my over twenty years of real estate experience, I have seen how White House policies could affect affordabilitylending and inventory. Some of the potential moves by the incoming administration could help shoppers, while others could create new hurdles.
Here’s what the next administration’s policies could mean for you as home buyer or home owner.
Can Trump’s policies help the housing market?
Here are a few ways Trump’s politics can boost the housing market:
Lower taxes: Trump’s previous tax cuts under the Tax Cuts and Jobs Act of 2017 returned more money to many US households while raising taxes for others. However, this is not so easy. If he extends or expands those cuts, it could help families save for a down payment. Changes to the SALT (state and local tax credit) cap could also result in tax relief for homeowners in high cost countries. But less tax revenue for the U.S. government could increase the federal deficit.
Deregulation: Trump has a history of deregulation, and we may see more of that in housing and lending. Less red tape can make it easier to get a loan, but don’t expect overnight changes – these things take time to roll out.
Fannie Mae and Freddie Mac Reform: Trump has talked about privatizing these government-backed institutions. Supporters say this could make the mortgage market more competitive, but removing the government guarantee could also raise rates.
Infrastructure investments: Improving infrastructure can create jobs, boost local economies and open up new housing markets. However, this depends on how effectively these investments are realized.
Are Trump’s Cab Policies Hurting the Housing Market?
While some policies can help, others can make things more difficult:
Labor shortage from deportations: Stricter immigration policies could reduce the construction workforce, leading to higher construction costs and slower development of new homes. Areas like Texas and Arizona, with booming new construction, could be hit the hardest.
Higher rates: If Trump imposes tariffs on imported building materials, such as drywall or lumber, the cost of home construction could rise. Builders are unlikely to eat these costs – they will pass them on to buyers.
Stronger growth equals higher rates: Trump is pro-business and pro-growth, but a stronger economy often means higher inflation. If this happens, Federal Reserve may have to slow or stop interest rate cuts which keeps borrowing costs higher.
How Trump might affect the Federal Reserve?
The president does not control the Federal Reserve, but the economy influences the central bank’s policy decisions. Mortgage rates are unlikely to drop significantly unless the economy slows or we enter a recession—and no one wants that trade-off.
Fed Chairman Jerome Powell recently said that monetary policy depends on “the totality of inputs.” If Trump’s policies boost economic growth and keep inflation high, the Fed may have to hit the brakes on rate cuts.
Read more: Still chasing 2% mortgage rates? That’s why it’s time to let them go
Does a stronger economy make things better for homebuyers?
A stronger economy has its pros and cons. On the one hand, higher wages and job growth can help buyers save for a home and qualify for a mortgage. On the other hand, strong demand can push home prices higher, especially when inventory is still scarce.
This is where it gets tricky. A better economy can help your paycheck, but it can also make finding an affordable home even more difficult.
Read more: Trump can’t cut interest rates. But what power does he have over the Federal Reserve?
Can you have lower taxes and lower interest rates at the same time?
The idea of ​​lower taxes and lower interest rates sounds great, but it is difficult to implement. Lower taxes often stimulate the economy, leading to inflation. When inflation rises, the Fed usually raises interest rates to cool things down.
It’s a balancing act, and historically, you can’t have both at the same time. So if taxes go down, don’t hold your breath waiting mortgage rates to follow.
Read more: How the Federal Reserve Affects Mortgage Rates
Should you buy a home in 2025?
The truth is, we are waiting for the perfect market conditions it doesn’t always pay off. If mortgage rates fall significantly, more buyers will jump in, creating competition and driving up prices.
If you are in good financial status — you have savings, solid credit and stability in your life — 2025 may be the right time to buy. Focus on what you can control, like yours budget and finding the right home for your needs. Remember, it’s not about timing the market, it’s more about timing your life.
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