The U.S. housing market was a major issue for voters in the 2024 presidential election, as low inventory continues to drive home prices to new highs. The eye-popping price tags of homes coupled with elevated mortgage rates in recent years have pushed the American dream out of reach for an increasing number of Americans in a prolonged affordability crisis.
Both Vice President Harris and President-elect Trump vowed to address America's housing woes if they won the White House, and with Trump emerging as the victor this week, the real estate industry is taking a fresh look at how his policies might impact the market.
A pre-election analysis by Realtor.com gave mixed reviews on both candidates plans, praising some of their proposals while warning of potentially negative impacts from others.
The online realty company hailed Trump's plans to boost housing supply by targeting regulations on housing development, which he has characterized as "unnecessary" and a "killer." The report said cutting regulations could make it easier for builders to add homes at lower price points, noting that the cumulative cost of regulations at the federal, state and local levels add more than $90,000 to the cost of a new home.
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"Zoning rules, building codes, and labor standards are just some of the regulations that builders navigate during the process of developing a lot and building a home," Realtor.com chief economist Danielle Hale told FOX Business.
"Builders and developers pay fees directly to the government, shoulder costs to study impacts of construction and comply with various rules, and also run into delays waiting for approvals," Hale explained. "While many of these rules are undoubtedly well-intentioned, they layer on costs that are ultimately borne by the consumer."
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The analysis also said Trump's pledge to bring down inflation and lower mortgage rates would benefit the housing market because it would reignite the stagnant market, noting lower 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.
However, Realtor.com's analysis took issue with Trump's plans for increasing tariffs and decreasing immigration, arguing those proposals could have unintended consequences for the housing market.
Republicans have argued that the surge of illegal immigration in the U.S. has contributed to driving up housing costs because it has increased demand, but Realtor.com argues decreasing immigration could backfire as far as the real estate market goes.
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In the short term, the report says, reducing immigration could "severely hurt" the labor supply needed for new home building. The analysis points to data from the National Association of Home Builders (NAHB) indicating that up to a third of residential construction employment consists of foreign-born workers.
Cutting immigration numbers could also hurt demand in the housing market in the long-term, the report warns, because reducing immigration could lead to negative population growth in the U.S., since the total fertility rate nationally in the U.S. sits at 1.67, well below the population-sustaining rate of 2.1.
"In other words," it reads, "without immigration to fill the population replacement gap, the country would likely see falling aggregate demand for housing."
While some real estate experts have dismissed concerns about Trump's plan for increasing tariffs, Realtor.com said expanding such taxes on imported goods could drive up housing costs.
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"A significant share of building materials are imported including cement, steel, and lumber," Hale said. "There are already tariffs on these goods, and it's unclear to what extent additional taxes would be imposed. What's more certain is that additional tariffs will likely mean higher prices for U.S. consumers."
