Trump tries to tackle housing costs — but even allies say relief is unlikely soon

President Donald Trump is eager to show voters he’s making housing more affordable. But even some allies acknowledge their policies are unlikely to have a meaningful impact by Election Day.

Over the past few months, as it has become clear that affordability will be a central theme of the midterm elections, the White House has put forward a series of proposals aimed at combating high housing costs.

Trump administration instructed government-controlled mortgage finance institutions to purchase Billions of dollars in securities to lower mortgage rates. Minister signed an executive order barring institutional investors The abandonment of receiving government support when purchasing a detached house as an investment increased house prices for individual buyers. And the White House swam and finally retreated50 year mortgage offer.

But economists say that to the extent of cutting costs, these policies will have only minimal impact at best.

“I don’t think there’s a magic solution to this — certainly not within the next 10 months,” said Mark Zandi, chief economist at Moody’s Analytics. “The proposals that have been proposed are really borderline. They’re not going to really move the dial to a meaningful degree.”

Against this backdrop, some White House allies acknowledge that what they will face in the coming months is less a policy fight and more a messaging campaign. The real challenge for the President, they say, is to show voters through his housing policies that he feels their pain; even if there is little it can do to materially reduce housing costs in the near term.

“I don’t think this solves affordability,” said one person close to the White House, who agreed to anonymity to speak candidly about the administration’s housing agenda. “Moving the housing market is like turning a super tanker. It’s not easy.”

“But,” added the person speaking about the administration’s housing policies, “it’s important to show that you care.”

The House passed a bipartisan bill Monday night that expands mortgage accessibility, eases environmental reviews for some residential construction and establishes voluntary zoning rules for local governments to make it easier to build homes. The Senate passed a version in the fall and the president supports the package.

But there are crucial differences between the House and Senate versions, such as the community bank deregulations in the House bill that Senate Democrats may oppose. The White House is also pushing for the inclusion of an amendment codifying an institutional investor executive order, which is unwelcome by Republicans. These points of tension will make it difficult to reach consensus to send to Trump’s desk.

Economists emphasize that it will take a long time for even the best policies to materially impact the $55 trillion housing market. They add that a problem that has been around for decades cannot be solved overnight. The national average single-family home price is now five times the median household income, according to the report. Harvard University Joint Center for Housing StudiesCompared to homes worth roughly three times the income in the 1990s.

But with the typical age of first-time homebuyers now 40, according to an analysis by the National Association of Realtors, there is a political imperative to address an issue that is increasingly important to young voters. This is a record number. GOP pollster Brent Buchanan said the president’s stance on making housing more affordable without lowering home prices doesn’t sit well with this segment.

“It’s kind of hard to get the message out to voters under 40 when the president says he wants to raise housing prices,” Buchanan said, adding that the president’s comments “angered younger voters.”

White House aides acknowledge that some policies will take time to pay off. But they argue that voters will see results before the November election; This points to a continuation of the interest rate cuts the president has insisted on; This could indirectly lower mortgage rates, in addition to general efforts to free up housing stock through efforts to raise wages, combat inflation, and even force immigration.

“We have taken, and continue to take, a lot of material action to create affordable housing here, especially for young people,” said a White House official who asked to remain anonymous to share the administration’s thinking. “These things take time. This is not a super liquid market, it’s housing.”

White House spokesman Davis Ingle said in a statement that the administration was “committed to exploring every possible tool to make available to the American people.”

“President Trump’s successful and prudent economic policies are making housing more affordable again by cutting red tape, easing borrowing costs, and creating an economy where income growth rises faster than housing costs,” Trump said. “Under President Trump’s leadership, more Americans will be able to achieve the American dream of homeownership.”

So far, the White House appears interested in policies aimed at attracting buyers to the existing market, such as lowering mortgage rates, rather than increasing housing supply, which would theoretically lower the average price of a home. However, the impact of some of these policies was short-lived.

When Trump ordered Fannie Mae and Freddie Mac to buy $200 billion in mortgage-backed securities in an effort to lower mortgage rates, the 30-year fixed interest rate plummeted — but the market quickly recovered on fears of Trump’s possible invasion of Greenland.

Others failed to materialize, such as the president’s proposal to create 50-year mortgages that would help homeowners with their monthly payments but create more financial risk in the long run. Trump also seems to have given up an idea that will allow People are turning to retirement and college savings accounts to pay for their down payments.

Federal Housing Finance Director Bill Pulte, who is leading the mortgage bond purchase on Trump’s behalf, disputed the idea that the administration is pressed for time to address voters’ housing cost concerns.

“Contrary to what this article attempts to portray, mortgage affordability is at a four-year high after President Trump’s $200 billion in mortgage bond purchases cut Biden’s sky-high mortgage interest rates,” Pulte told POLITICO.

Mortgage interest rates are at their lowest level in 3 years according to data Charged by government-controlled mortgage company Freddie Mac, but those rates still significantly high Compared to before and immediately after the COVID-19 outbreak.

And rates aren’t the only issue.

Not enough new homes are being built, housing experts say, keeping prices high and keeping potential buyers on the sidelines. The average price of a new home in October was $392,000. Census BureauIn 2020 it was $331,000.

Accordingly June report of the White House Council of Economic AdvisersThe average number of new units started in construction in a given year has fallen to just 3,000 per million people, down from roughly 6,000 in the two decades leading up to the housing crash.

“That’s the most frustrating thing: All you have to do is look at this and that and say, ‘Oh, supply is a problem.’ means. … This isn’t like advanced astrophysics,” said another person familiar with the administration’s conversations on housing policy, who spoke on condition of anonymity to speak candidly about the approach. “We’ve underbuilt for 18 years. They’re not going to do anything right now that will dramatically affect housing prices.”

Although the most direct way to help buyers is to lower prices, this poses a political problem. Lowering home values ​​is a surefire way to anger the millions of Americans who own homes and benefit from their homes increasing in value; Trump has said his goal is not to drive down prices but to increase equity for homeowners, a point he has repeatedly underlined in recent weeks.

But White House aides argue that any action that suppresses prices would also suppress supply, reducing incentives to build new homes and hurting young homeowners who have bought homes in recent years. They argue that policies aimed at lowering mortgage rates would benefit not only potential home buyers but also existing people looking to buy a new home.

The White House official said that lowering prices, by contrast, “could cause a lot of economic problems for a demographic group that we’re trying to help.”

Builders, meanwhile, complain about high insurance, financing costs, local regulatory burdens, tariffs and labor restrictions, some of which have been exacerbated by Trump’s immigration agenda.

But they praise deregulatory steps the administration has taken to streamline environmental reviews, loosen fair regulations and reduce compliance requirements for federally backed projects.

“Deregulatory actions taken by the administration are critical,” said Jim Tobin, president and CEO of the National Association of Home Builders.

Some of the administration’s more notable ideas, like builders’ effort to build 1 million rental “Trump Homes” An opinion reported by Bloomberg – remains concept rather than concrete policy, and even its allies cannot be sure what its impact on the ground will be.

“Ideas that look promising at first glance but have all these unintended consequences are sucking up a lot of the oxygen,” said Tobias Peter, senior fellow and co-director of the Housing Center at the American Enterprise Institute.

Still, Seth Appleton, president of the Mortgage Insurers of the United States and a former top HUD official during Trump’s first term, argued that some changes will be felt this year: a change in manufactured home construction requirements could increase supply; increased tax refunds can help improve the economic situation of families; and in some parts of the country additional supply is coming online.

“There are things going on right now at a broad level, and they will definitely be felt this year,” Appleton said. “This is a year of great opportunity for housing policy.”