Will Trump’s Policies Help or Hurt the Housing Market? Here’s My Take as a Realtor
Trying to predict how a second term for Donald Trump will play out May affect the real estate market It’s not easy. While much of this is speculation, we can look at his past policies and campaign promises to get a better idea of ​​his thinking possible occur. For example, Trump has talked about lower mortgage ratesbut for the interest rate dropped to 3%would require a severe economic recession – which no one wants.
Having been engaged in real estate for more than 20 years, I have seen it with my own eyes How White House policies affect affordabilityloans and inventories. Some potential moves by the incoming administration could help buyers, while others could create new obstacles. Let’s break down what his policies mean for you home buyers or Homeowner.
Read more: 2025 Mortgage Forecast: Return to low rates unlikely under Trump
Could Trump’s policies help the housing market?
here are some methods Trump’s policies May boost housing market:
lower taxes
Trump’s previous tax cuts enacted under the Tax Cuts and Jobs Act in 2017 brought more money back to many American families while raising taxes for others. However, things are not that easy. If he extends or expands these cuts, this could help families Save on down payment. Changes to the SALT cap (State and Local Tax Credit) may also result in tax relief for homeowners in the following areas: high cost country. But lower tax revenue for the U.S. government could increase the federal deficit.
deregulation
Trump has a history of cutting regulations, and we may see more of that in the housing and lending space. Reducing red tape may make it easier to qualify for a loan, but don’t expect changes to happen overnight—these things take time to unfold.
Fannie Mae and Freddie Mac Reform
Trump has talked about privatizing these government-backed institutions. Supporters say it could make the mortgage market more competitive, but removing government guarantees could also raise interest rates.
infrastructure investment
Improving infrastructure can create jobs, stimulate local economies and open up new real estate markets. However, this depends on how well these investments are implemented.
Will Trump’s policies hurt the housing market?
While some policies may help, others may make things more difficult:
Evictions create labor shortage
Stricter immigration policies could reduce the construction workforce, leading to higher construction costs New housing development slows. Areas like Texas and Arizona, where new construction is booming, may be hardest hit.
higher tariffs
If Trump imposes tariffs on imported construction materials like drywall or lumber, the cost of building a home could rise. Builders are unlikely to bear these costs – they will pass them on to buyers.
Stronger growth equals higher interest rates
Trump supports business and growth, but a stronger economy often means higher inflation. If this happens, then Fed may have to slow down or stop interest rate cuts, which leading to higher borrowing costs.
Will Trump make the Fed change its interest rate cut plan?
The president does not control the Fed, but the economy does influence the central bank’s policy decisions. Unless the economy slows down or we enter a recession, mortgage rates are unlikely to fall significantly — and no one wants that trade-off.
Federal Reserve Chairman Jerome Powell recently said monetary policy depends on “the aggregate data that comes in.” If Trump’s policies spur economic growth and keep inflation high, the Fed may have to hit the rate-cutting brake.
Read more: Still chasing 2% mortgage rates? That’s why it’s time to let them go
Will a stronger economy make life better for homebuyers?
A stronger economy has pros and cons. On the one hand, higher wages and employment growth able Help buyers save money to buy a home and qualify for a mortgage. On the other hand, strong demand could push home prices higher, especially if inventory remains tight.
This is where it gets tricky. A better economy might increase your salary, but it might also make finding affordable housing more difficult.
Can taxes and interest rates be lowered at the same time?
The idea of ​​lower taxes and lower interest rates sounds good, but is difficult to achieve. Lowering taxes usually stimulates the economy, causing inflation. When inflation rises, the Fed typically raises interest rates to cool it.
It’s a balancing act, and historically you can’t have both. So if taxes drop, don’t wait with bated breath mortgage interest rates follow.
Read more: How the Fed affects mortgage rates
Should you buy a house in 2025?
The truth is, waiting for perfect market conditions doesn’t always pay off. If mortgage rates drop significantly, more buyers will jump in, creating competition and pushing prices up.
if you are in a good financial condition — You have savings, solid credit, and a stable life — 2025 might be the best time to buy. Focus on the things you can control, like your Budget and find a home that suits your needs. Remember, it’s not so much about timing the market as it is about timing in life.
