The Truth About Trump’s Housing Proposals: Insights From a Realtor
Donald Trump’s second term as president will surely Impact on the real estate marketbut the question is, how exactly? While a lot of it 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.
In my more than twenty years of real estate experience, I have seen How White House policies affect affordabilityloans and inventories. Some potential moves by the incoming administration could help buyers, while others could create new obstacles.
Here’s what the next administration’s policies could mean for you home buyers or Homeowner.
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.
Are Trump’s policies hurting the housing market?
While some policies may help, others may make things more difficult:
Labor shortages caused by evictions: 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 cutting interest rates, which leading to higher borrowing costs.
How does Trump affect the Fed?
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.
Read more: Trump can’t lower interest rates. But what power does he have over the Fed?
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 rate 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 could 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.
