Damian Eales Chief Executive Officer | realtors.com
Donald Trump is set to return to the White House for a second term, following a closely contested election. After securing the necessary electoral college votes from key swing states, Trump will become the 47th president of the United States. The Republican Party has also regained control of the Senate, while control of the House remains undecided as votes are still being counted in several tight races.
In his victory speech in West Palm Beach, Florida, Trump described his win as “a political victory that our country has never seen before” and pledged to “fight for you and your future.” He assured supporters that they would be “very happy” and “very proud” of their vote, stating that America had given him an "unprecedented and powerful mandate."
The election took place amid a housing crisis characterized by high home prices and many renters being cost-burdened. On the campaign trail, Trump attributed rising home prices to illegal immigration during Joe Biden's presidency and suggested he would lower mortgage rates if elected.
One of Trump's key proposals is mass deportation of immigrants, which he claims will ease housing prices by reducing demand. However, experts like Realtor.com® senior economist Ralph McLaughlin warn that such actions could negatively impact the U.S. housing market by affecting labor supply needed for new homebuilding. LendingTree senior economist Jacob Channel echoed these concerns, noting that mass deportations could have catastrophic economic consequences.
Trump also plans to cut regulations and open federal land for building to reduce housing costs. He claimed in a September speech that eliminating regulations could halve new home costs. However, data from the National Association of Home Builders suggests these figures may be exaggerated. While economists agree that reducing regulations could help increase housing supply, achieving Trump's envisioned price relief appears challenging.
Another proposal involves pressuring the Federal Reserve to lower interest rates to reduce mortgage rates. However, economists point out that neither presidents nor the Fed directly control mortgage rates, which are influenced by broader economic factors.
Economists generally agree that America's housing affordability crisis stems from a shortage of homes built over more than a decade. While some of Trump's proposals might marginally boost construction, experts caution that other measures could hinder supply or exacerbate existing issues.
“Simply put, what little Trump and his campaign have stated about his housing policies doesn’t stand up to scrutiny,” wrote Channel. Housing economists emphasize that quick fixes are unlikely due to longstanding issues with undersupply since the Great Recession.
Ken Johnson from the University of Mississippi expressed skepticism about both parties' ability to address the housing shortage effectively: “Both the Republicans and Democrats will have proposals that will sound good on paper but do very little to change the housing shortage.”
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