What Donald Trump’s Win Means for Housing Market

Now that President-elect Donald Trump has secured four more years in the White House, there are questions about how the housing market could be impacted.
When it comes to the housing market, home buyers have been complaining for years about rising prices and high interest rates that effectively make it impossible for many everyday Americans to purchase their first home.
“Many in the real estate business are elated with a Trump victory, and if the administration can live up to its campaign promises, rightfully so,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek.
“For months, he has been advocating for lower interest rates, which have become one of the most significant barriers to home ownership in the post-pandemic years.”
However, Beene cautioned that lower interest rates typically bring higher prices, and it will be a “balancing act” to see if the Trump administration can successfully implement them.
“Republicans not only won the presidency but will also have a majority in the Senate,” Realtor.com Chief Economist Danielle Hale told Newsweek. “Results for the House of Representatives are yet to be determined, but a Republican sweep is possible, enabling the incoming administration to move quickly on priorities.”
Hale called Trump’s impact on the housing market a “toss-up,” saying the chief problem is the lack of supply. There has been a shortage of between 2.5 and 7.2 million homes over the last decade, according to Realtor.com.
“The Republican Party platform and President-elect Trump on the campaign trail acknowledged these challenges, shining a light on problems that many voters face daily,” Hale said. “The proposals to tackle these challenges, however, are likely to have a mix of good and unintended, but negative, consequences for the housing market.”
Hale said Trump’s supply-side policies will likely help the supply, but his demand-focused proposals could have unintended negative consequences.
Trump previously said he wanted to combat “unnecessary” housing development regulations, which can add more than $90,000 to the price of a new home. Trump and the Republican Party have also discussed making federal lands available for housing development.
While Trump promised to curb inflation, Hale said his actual policies could worsen the situation.
“Falling mortgage rates would unlock homeowners who currently find moving untenable because their existing mortgage rate is so much lower than the market rate and also improve prospects for buyers by amplifying the buying power of their existing budgets,” Hale said.
“However, taken as a whole, the various Trump policies could have the impact of raising inflation, particularly impacts stemming from proposed tariffs and reductions in immigration.”
Hale said Trump’s plans to curb illegal immigration could also significantly affect the labor supply needed to build new homes. According to the Census Bureau, up to a third of residential construction employs foreign-born workers.
But beyond all of Trump’s talking points, there’s still uncertainty on what policies Trump will advocate for once he’s president again, said Robert Shapiro, a political science professor at Columbia University.
“We really do not know exactly what his policies would be,” Shapiro told Newsweek.
“[Vice President Kamala] Harris’ ideas to offer subsidies/incentives and promote deregulations to builders and local governments to increase housing were good ones that would not conflict with conservative ideology, in contrast to her proposal to offer subsidies to first-time buyers, which would increase the price of housing.”
Harris, who conceded to Trump on Wednesday, promised to offer $25,000 in down payment assistance to first-time home buyers and said she would give tax breaks to builders selling to them.
Ben Allen, the co-founder and COO of construction permitting platform GreenLite, said that if Trump can help create an environment where the Fed can offer lower interest rates, there would likely be a fresh wave of real estate development across the country.
“A lower cost of capital with better economics for developers should help accelerate development while bringing more housing inventory online faster,” Allen told Newsweek. “The entire market benefits—developers, buyers and sellers alike.”
Jeff Holzmann, Chief Operating Officer of Texas-based commercial real estate company RREAF Holdings, said the real estate industry generally believes Trump is good for business.
“The fact that Trump is a real estate developer himself also lends to the feeling that he ‘understands’ the market and what drives demand, quality and profits,” Holzmann told Newsweek.
He added: “Only time will tell, but the feeling around the street is that less regulation and favorable lending terms will create more incentives for developers, additional supply and stimulated competition. These are all good things for home buyers and investors.
“The fact that Wall Street is betting the new administration will be a net positive for the economy is already a good sign. A big question mark will be tariffs and how and who is appointed to key positions in cabinet and government agencies.”