Industry Professionals Wait On Trump To Flesh Out His Housing Policy

By Charles Grand
CandysDirt.com Contributor

President-elect Donald Trump’s plans to alleviate the nation’s housing shortage could yield mixed results for builders and prospective homebuyers. The anticipated combination of deregulation and tax relief will more than likely stimulate activity in the sector, but many Americans may still find themselves priced out of the market.

A recent Zillow analysis put the national shortage in 2022 at 4.5 million homes. Last year, Texas was short some 300,000 housing units alone, with listings spiking roughly 30% between 2020 and 2022, as previously noted by CandysDirt.com.

Granted, the incoming administration (which is still taking shape) has not fleshed out its exact plan of attack. Nevertheless, key policy planks from Trump’s campaign hint at what could come in the next few years.

“In general, today’s housing market faces two major challenges: supply and affordability. While there is hope that economic conditions will improve, it may be too soon to speculate on the impact of the President-Elect’s policies impacting the housing market,” said Bill Head, the director of communications for MetroTex Association of Realtors, in an email to CandysDirt.com.

Increasing Housing Stock

It may indeed be difficult to make such projections considering the somewhat contradictory nature of Trump’s bevy of policy proposals. On the one hand, he said he wants to increase housing stock by opening up federal lands for development and eliminating regulatory barriers to residential construction. On the other hand, he made tariffs and the mass deportation of undocumented immigrants mainstays of his campaign, both of which could have serious inflationary effects that would be passed on to prospective homebuyers.

“He did point out during the campaign how government regulations are responsible for nearly 24% of the cost of a single-family home and around 40% of a multifamily home, with the intent that he wants to address that. So it does give an expectation of needed regulatory relief,” said David Lehde, director of government affairs for the Dallas Builders Association, in a statement to CandysDirt.com.

“Trump’s previous term emphasized deregulation. Less red tape could streamline projects, potentially making timelines faster and lowering costs,” he added.

Still, studies have highlighted how undocumented immigrants are overrepresented in construction (1-2 million people), accounting for as much as 25% or more of certain occupations and 10-19% of the sector’s entire workforce. Their removal from the country would result in significant disruption and an increase in labor costs. Reports suggest that the incoming administration may also try to reduce legal immigration as well.

“In the short run, reducing immigration could severely hurt the labor supply needed for new homebuilding since up to a third of residential construction employment consists of foreign-born workers,” said Realtor.com senior economist Ralph McLaughlin, noting that a steep reduction in immigrant workers would result in “spill-over effects to the broader economy.”

Houses could end up costing more and take longer to build.

Similarly, sweeping tariffs would drive up the price of raw building materials (lumber, aluminum, and steel) and finished goods (garage doors and air conditioners). In a nutshell, houses could end up costing more and take longer to build.

“There is a concern that widespread tariffs could have an inflationary impact. Any tariffs raise the cost on products and those increases are ultimately paid for by the consumer. We are especially concerned about lumber tariffs because they act as a tax on American builders, home buyers, and consumers,” Lehde said.

Resurgent inflation could also reverse the trajectory of mortgage rates. Federal Reserve Chairman Jerome Powell recently said he intends to maintain the independence of the central bank, suggesting he would resist any demands by Trump — who has previously insisted the president should have an influence on Fed decisions — to loosen monetary policy if the playbook calls for interest rate hikes to check rising prices.

“It’s such an early stage,” Powell said last Thursday, per CNBC. “We don’t know what the policies are, and once we know what they are, we won’t have a sense of when they’ll be implemented.”

Housing policy didn’t take center stage during Trump’s first term. Then-HUD Secretary Ben Carson largely spent his tenure overseeing budget cuts and reversing Obama-era rules around fair housing laws. Now, with a national housing shortage and affordability crisis in sharp relief, the incoming administration may feel more motivated to act ahead of midterm elections in 2026.

While Republicans secured control of the federal government this past election, it remains unclear how much Trump can deliver on his promises — Senate filibuster notwithstanding. No doubt he will want to advance his broader agenda. The trick will be doing so without triggering an acceleration in inflation.

“With housing plans remaining brief in the Republican party’s platform, it’s essential that real estate agents should stay close to the news,” advised KeyLeads founder Cynthia Seifert in a statement to Chicago Agent Magazine. “[Agents must] reassure their clients with timely updates on what specific policies could mean for them.”