Trump Promised To Lower Housing Costs “By Half,” But That’s Unlikely

Donald Trump will be sworn in for a second time today, and the mortgage industry is anxiously waiting to see how homebuyers and sellers will respond to his administration.
“We will eliminate regulations that drive up housing costs, with the goal of cutting the cost of a new home in half,” he said in a speech at the Economic Club of New York last year.
Analysts’ opinions of a Trump housing market are mixed. Some in the housing world are happy to see Trump returning to office, pointing to his plans to scratch regulations that make home purchases pricier.
He has also argued for opening up federal land for new homes, potentially helping lower upfront costs as builders struggle to find affordable areas for construction.
“Land is expensive and financing for private builders remains costly. However, there is hope that policymakers are taking the impact of regulatory hurdles seriously and will make improvements in 2025,” Chairman of the National Association of Home Builders Carl Harris commented.
But most analysts expect Trump’s second presidency to lead to higher costs across the board.
For one, opening up federal land will probably only impact a small number of American homebuyers, as it’s concentrated in rural areas.
“That doesn’t do anything for these densely populated blue cities that really need the most help,” Daryl Fairweather, chief economist at Redfin, said of the plan.
Additionally, Trump’s proposed tariffs and immigration restrictions might increase the cost of both construction labor and lumber, wiping out any perceived gains in affordability from regulatory changes.
Tariffs are likely to rekindle inflation, as well, which could set the Central Bank back in its rate-cut progression. Fed Chairman Jerome Powell recently expressed concern over Trump’s plans and the FOMC seems less likely to cut rates in 2025.
Mortgage rates shot up to 7% in the first weeks of January in anticipation of these changes, and industry experts predict they’ll stay high.
States remain free to pursue their own policies at the local level, which have a far greater impact on any one area’s housing supply and costs.