Trump Tries To Tackle Housing Costs — But Even Allies Say Relief Is Unlikely Soon

President Donald Trump is eager to show voters he is making homes more affordable. But even some allies concede there's little chance his policies will have a meaningful impact by Election Day.

Over the last few months, as it has become apparent that affordability would be a central theme of the midterm elections, the White House has put forward a bevy of proposals aimed at tackling high home costs.

The Trump administration directed government-controlled mortgage finance agencies to purchase billions in securities to lower mortgage rates. The president signed an executive order blocking institutional investors from receiving government support when buying single-family homes as investments, which has driven up home prices for individual buyers. And the White House floated, and ultimately backed off, a proposal for a 50-year mortgage.

But economists say those policies, to the extent any lower costs, are likely to have only minimal impact at best.

“I don’t think there’s any magic bullet there — certainly not in the next 10 months,” said Mark Zandi, chief economist at Moody’s Analytics. “The proposals that have been put forth are really on the margin. They’re really not going to move the dial to any meaningful degree.”

Against that backdrop, some White House allies acknowledge what they face in the coming months is less a policy fight than a messaging campaign. The challenge, they say, is for the president to show voters through his housing policies that he feels their pain — even if there’s little he can do to materially lower housing costs in the near term.

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

“But,” the person added of the administration’s housing policies, “it’s important to show that you give a crap.”

The House on Monday night passed a bipartisan bill that expands home loan accessibility, streamlines environmental reviews for some housing construction and establishes voluntary zoning guidelines for local governments to make it easier to build housing. 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 community bank deregulations in the House bill that Senate Democrats may balk at. The White House is also pushing to include an amendment codifying its institutional investor executive order, which is not seen favorably by Republicans. Those tension points will make it harder to reach a consensus to send to Trump’s desk.

Economists stress that even the best policies will take a long time to materially affect the $55 trillion housing market. A problem caused over decades, they add, won’t be resolved overnight. The national median single-family home price is now five times the median household income, according to Harvard University’s Joint Center on Housing Studies, compared to houses that were roughly three times income in the 1990s.

But there is a political imperative to address an issue that is increasingly important for younger voters, as the typical age of first-time home buyers is now 40 years old, a record high, according to an analysis from the National Association of Realtors. And the president’s posture that he wants to make housing more affordable without decreasing home prices isn’t sitting well with that cohort, said GOP pollster Brent Buchanan.

“It's kind of hard to message to voters under 40, when the president says he wants to make housing prices go up,” Buchanan said, adding that the president’s comments have “ticked off 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, pointing to the continued interest rate cuts the president is pushing for, which could, indirectly, lower mortgage rates, in addition to its overall efforts to raise wages, combat inflation and even free up housing stock through their immigration enforcement efforts.

“We have and continue to take a lot of material action here toward creating housing affordability, for young people especially,” said one White House official, granted anonymity to share the administration’s thinking. “These things take time. It’s not a super liquid market, housing.”

White House spokesperson Davis Ingle said in a statement that the administration is "committed to exploring every tool possible to deliver for the American people."

“President Trump’s successful and commonsense economic policies are making housing more affordable again by cutting red tape, easing borrowing costs, and creating an economy where income growth is rising faster than home 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 primarily interested in policies that entice buyers into the existing market, such as lowering mortgage rates, as opposed to increasing the housing supply, which, in theory, would reduce the average price of a home. But the effect of some of those policies has been short lived.

When Trump directed Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities in an effort to decrease mortgage rates, the 30-year fixed rate did fall — though it quickly rebounded as the market spooked at the possibility of Trump invading Greenland.

Others have failed to launch, like the president’s proposal to create a 50-year mortgage, which would have helped homeowners with their monthly payments but created more financial risk in the long term. Trump also appears to have abandoned an idea that would have allowed people to dip into their retirement and college savings accounts to afford down payments.

Federal Housing Finance Director Bill Pulte, who led the mortgage bonds purchase on Trump’s behalf, disputed the idea that the administration is facing a time crunch to address voters’ home cost concerns.

“Contrary to what this article tries to portray, mortgage affordability is at a four year high, after President Trump’s $200 billion purchase of mortgage bonds lowered Biden’s sky high mortgage interest rates,” Pulte told POLITICO.

Mortgage rates are at a 3-year low according to data collected by the government-controlled home loan corporation Freddie Mac, but those rates are still significantly elevated compared to before and immediately after the COVID-19 pandemic.

And the rates aren’t the only concern.

There aren’t enough new homes being built, according to housing experts, keeping prices high and would-be buyers on the sidelines. The median price for a new home in October was $392,000, according to the Census Bureau, up from $331,000 in 2020.

According to a June report from the White House’s Council of Economic Advisors, the average number of new units on which construction has started in a given year has dropped from roughly 6,000 per million people in the two decades leading up to the housing collapse to just 3,000 since.

“This is what's just so frustrating: All you have to do is look at this and at this and go, ‘Oh, supply is a problem.’ … This is not, like, advanced astrophysics,” said another person familiar with the administration’s conversations on housing policy, granted anonymity to speak candidly about the approach. “We've underbuilt for 18 years. There's nothing they're going to do right now that's going to affect the price of housing dramatically.”

And while the most direct way to help buyers is bringing prices down, it presents a political problem. Lowering home values is a surefire way to anger the millions of Americans who own homes and have benefitted from their rise in value, a point Trump has underscored repeatedly in recent weeks by saying that his goal is not to drive prices down but up — boosting equity for home owners.

White House aides, however, argue that any action that depresses prices would also depress supply, reducing the incentives to build new homes, in addition to hurting young homeowners who have purchased in recent years. Policies aimed at lowering mortgage rates, they argue, will not only benefit prospective home buyers but existing ones who want to buy a new home.

Lowering prices, by contrast, “could cause a huge set of economic issues for a demographic we’re trying to help,” the White House official said.

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

They do, however, praise the deregulatory steps the administration has taken aimed at streamlining environmental reviews, loosening fair-housing enforcement and reducing compliance requirements for federally backed projects.

“The deregulatory actions that the administration has taken are critical,” said Jim Tobin, president and CEO of the National Association of Home Builders.

Some of the administration’s splashier ideas — like builders’ push to construct 1 million rent-to-buy “Trump Homes,” an idea reported by Bloomberg — remain more concept than concrete policy, leaving even allies unsure what the impact would be on the ground.

“A lot of the oxygen gets sucked up by ideas that at first blush seem promising but have all these unintended consequences,” said Tobias Peter, senior fellow and the co-director of the American Enterprise Institute's Housing Center.

Still, Seth Appleton, president of U.S. Mortgage Insurers and a former senior HUD official during Trump’s first term, argued that there will be some changes that will be felt this year: a change to requirements for manufactured housing construction could increase supply; increased tax refunds could help improve families’ economic situations; and additional supply is coming online in some parts of the country.

“From a broad level there’s things that are happening now that will absolutely be felt this year,” Appleton said. “This is a big year of opportunity for housing policy.”