Trump’s Win More Likely To Harm Housing Affordability Than Help
Donald Trump defeated Kamala Harris to claim the presidency.
“We’re going to make you very happy, we’re going to make you very proud of your vote. America has given us an unprecedented and powerful mandate,” Trump said in a victory speech.
For mortgage professionals, this could translate to higher interest rates and more expensive housing, keeping homebuyers and sellers on the sidelines for longer.
Construction professionals could also take a hit if Trump’s anti-immigration and pro-tariff plans are put in place, analysts say.
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. But the things Trump can control from the White House are more likely to harm affordability than help it.
Trump didn’t put forth much housing policy during his campaign but promised to lower energy costs, which he said would help bring prices down. He has also argued for using federal lands for housing development and minimizing regulations on homebuilding.
“The pro-supply parts of his agenda (environmental deregulation and opening federal lands for development) are things the federal government could easily do. But so are his plans for the mass deportation of immigrants who build housing and tariff hikes on imported building materials,” analyst Christian Britschgi wrote in his housing newsletter for Reason.com.
Trump supports mass deportations and has claimed that undocumented immigrants increase shelter costs. Economists disagree that they have any serious impact, however, and note that deportations would raise prices due to construction companies’ dependence on immigrant labor.
“In the short run, reducing immigration could severely hurt the labor supply needed for new homebuilding since up to a third of residential construction employment consists of foreign-born workers,” Realtor.com senior economist Ralph McLaughlin said.
It could be argued that Trump could jumpstart a slow housing market.
“Trump’s a real estate investor, and some of the first executive orders he passed the last time he was elected president really affected the real estate markets immediately,” Dutch Mendenhall, co-founder of RADD Companies, told NorthJersey.com.
“He’s going to do things that kind of traditionally grow and expand real estate, and affect real estate, in a positive way.”
However, that could lead to more pressure on housing markets with low inventory, drive up prices further, and make homes unaffordable for middle-class families.
The prospect of Trump’s election victory has been driving mortgage rates higher in recent weeks and daily mortgage rates were set to rise at the start of business on Wednesday.