Trump Orders Emergency Price Relief for the US Housing Market 👉 Updatem News

A shortage of homes is the ‘number one driver of housing cost,’ said a real estate expert.

President Donald Trump issued an executive order calling on authorities to ensure that U.S. citizens have access to cheaper housing.

“Many Americans are unable to purchase homes due to historically high prices, in part due to regulatory requirements that alone account for 25 percent of the cost of constructing a new home,” said the Jan. 20 order from Trump.

“Unprecedented regulatory oppression from the Biden Administration is estimated to have imposed almost $50,000 in costs on the average American household, whereas my first-term agenda reduced regulatory costs by almost $11,000 per household.”

“It is critical to restore purchasing power to the American family and improve our quality of life,” the order said while calling on the heads of all government agencies and executive departments to deliver “emergency price relief” to citizens.

This includes pursuing actions to bring down the cost of housing and boosting the housing supply.

According to data from the National Association of Realtors (NAR), a median-priced, existing single-family home cost $410,900 as of November 2024, up from $357,100 in 2021. Mortgage payments as a share of income climbed from 16.9 percent to 25.2 percent.

Meanwhile, Freddie Mac estimates a shortage of 3.7 million units in the United States as of the third quarter of 2024. This was only a small dip from the 3.8 million shortage roughly four years back in the fourth quarter of 2020.

NAR Chief Advocacy Officer Shannon McGahn welcomed Trump’s executive order, calling supply shortage the “number one driver of housing cost.”

Persistent high costs not only hurt the market but also push away first-time prospective buyers. In discussions with the Trump team, NAR members asked the administration to focus on affordability, property rights, and inventory, the group said.

“The president’s executive order underscores the critical need for bold, coordinated action to lower housing costs and increase the availability of homes for families across this country,” McGahn said.

Mortgage Rates, Federal Lands

In a Jan. 21 post, Redfin economist Chen Zhao said Trump’s first-day actions “will push mortgage rates down slightly.”

The average weekly rate on a 30-year, fixed-rate mortgage was 7.04 percent this past week, the first time since May 2024 that the rates breached the 7 percent level. Rates have not fallen below the 6 percent level for more than two years, worsening affordability.

While the executive order aims to cut down the regulatory burden of construction, there isn’t much information on how the president plans to achieve the goal, Zhao wrote, adding that most of the regulatory red tape that affects construction is local.

“Past presidents have incentivized local governments to build more housing. It’s possible Trump could take unprecedented measures, like withholding state funding or asserting the federal government has the legal authority to override local zoning laws in certain circumstances,” Zhao wrote.

During his campaign, Trump suggested opening certain areas of federal lands to boost the construction of new homes.

Realtor Senior Economist Joel Berner says that opening federal lands for residential construction is an option for the government “provided that environmental concerns are taken into account and that coordination with lower levels of government ensures speedy delivery of homes,” according to a Jan. 21 post.

However, a key limitation is that no major federal land is near places where people work and live, the company said.

Meanwhile, “absent here [in the order] is any mention of supporting prospective homebuyers with funds toward their purchase, which we are in agreement with, as these subsidies would simply result in higher home prices,” he said. “Bolstering home supply is the true long-term solution.”

The executive order was not just about housing costs but the overall “cost of living crisis” faced by Americans.

In addition to housing, Trump asked for measures to deal with increasing health care costs, create employment for Americans, terminate “coercive, harmful ‘climate’” policies that push up food and fuel prices, and eliminate “counterproductive requirements” raising home appliance prices.

Original News Source Link – Epoch Times

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