How Will Trump’s Presidency Impact Housing Trends?

Donald Trump’s presidency from 2016-2020 significantly influenced housing trends in the United States, driven by economic policies, tax reforms, and deregulation efforts. With his second term incoming, it’s expected that his return to office will significantly impact the housing market. If you’re thinking of buying or selling a home, what should you expect in the coming years? In this guide, we’ll examine the possible trends that will come from a second Trump term and how this will impact both home buyers and sellers.

How Trump’s Previous Term Impacted Housing Trends

Trump’s 2016-2020 presidency significantly impacted the housing market. The Tax Cuts and Jobs Act of 2017, for example, altered mortgage interest deductions and property tax caps, impacting homeownership affordability. Trump’s emphasis on deregulation fostered a business-friendly environment, encouraging new housing developments, particularly in suburban and rural areas. However, the trade tensions with China led to increased tariffs on construction materials, which raised building costs. Simultaneously, a robust economy and lower unemployment rates during much of his term supported higher home demand, driving prices upward. These policies created a mixed landscape, benefiting some homeowners and developers while challenging affordability for others, particularly in urban markets.

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How Trump’s Presidency Will Impact the Housing Market

Here’s a breakdown of how Trump’s upcoming term might influence the housing market in the next few years:

1. Boost in Housing Construction

• Trump plans to address housing shortages by reducing regulations on construction and zoning. This deregulation could stimulate new housing developments, especially in suburban and rural areas.
• By lowering costs for developers, the administration aims to make housing more affordable for buyers and renters.

2. Mortgage Rates Likely to Rise

• Economic policies, including trade tariffs and potential inflationary measures, may increase mortgage rates.
• Higher borrowing costs could reduce affordability for first-time buyers and those seeking larger homes.

3. Increased Institutional Investment in Housing

• Trump’s agenda might attract more institutional investors to the housing sector, which can drive property developments but may inflate property values, making it challenging for individual buyers.

4. Tax Reform and Its Impact on Homeownership

• Changes to federal tax laws, including adjustments to mortgage interest deductions, could alter the financial benefits of homeownership.
• States with high property taxes may feel these impacts more acutely, potentially deterring buyers in those areas.

5. Suburban Development Over Urban Expansion

• A shift in federal priorities could favor suburban and rural growth over urban housing markets.
• Urban areas may experience a slowdown in housing demand, potentially lowering prices in cities while increasing suburban home values.

6. Revised Environmental Regulations

• Rollbacks on climate and environmental regulations could lower development costs for builders.
• However, this raises questions about long-term sustainability and resilience of homes against climate challenges.

7. Addressing Housing Affordability Crisis

• Trump will most likely advocate for policies that spur private-sector solutions to housing shortages.
• The administration might incentivize developers to create affordable units, although success will depend on execution.

8. GSE Oversight and Loan Accessibility

• Changes to government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac could impact mortgage accessibility.
• Potential reforms could either open lending opportunities or tighten restrictions, affecting both buyers and lenders.

9. Inflation and Its Effects on Housing

• Inflationary pressures from tariffs or spending policies may increase material and construction costs.
• These effects could slow down housing developments and further strain affordability.

10. Housing Market Stability and Risks

• While deregulation might drive short-term growth, it introduces risks related to market volatility and housing bubbles.
• A lack of oversight could lead to speculative investments and uneven market stability.

Scenarios Where Trump’s Presidency Might Negatively Impact Housing Market

• High Home Prices: A second Trump presidency might not alleviate the issue of soaring home prices. Factors such as limited housing supply and inflationary trends contribute to challenges for first-time buyers and low- to middle-income families.
• Mortgage Rates: Mortgage rates are likely to remain high due to broader economic policies, including deregulation and fiscal stimulus, which can drive inflation and increase borrowing costs.
• Housing Affordability: While Trump has pledged to address housing affordability by stimulating construction, the effectiveness of such measures remains uncertain. Regulatory rollbacks may boost new developments but could exacerbate affordability gaps in urban areas.
• Construction Industry Impact: Trade policies and potential tariffs could increase costs for construction materials, affecting the housing supply and pricing.
• Investor Influence: Institutional investors may continue dominating the market under Trump’s policies, prioritizing profits over affordability, further sidelining individual homebuyers.
• Economic Volatility: Economic uncertainties tied to deregulation and potential trade conflicts could destabilize housing trends. Risks like inflation, slower growth, and rising unemployment may create additional hurdles for market recovery.

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As Trump’s presidency brings potential changes to housing trends—such as relaxed regulations and efforts to address affordability—Carey Moving & Storage is ready to support your transition in this evolving market.

Whether you’re taking advantage of increased construction opportunities or navigating the effects of new policies, our expert moving services ensure a seamless experience. From personalized packing solutions to efficient logistics, we make your relocation stress-free. Stay ahead of the market changes with a trusted partner by your side. Contact us today for a free moving quote and let us turn your next move into a hassle-free journey!