Experts predict the impact of the Trump presidency on the housing market.

• "Trump announced during an Aug. 15 news conference that federal land will be opened up for housing construction to address the housing affordability crisis."
• Experts suggest that while constructing more homes may seem like a straightforward solution to the housing crisis, other commitments made by Trump could hinder affordability efforts.

The new homes construction will be promoted by President-elect Donald Trump to tackle housing affordability in the U.S.

"Trump announced during an Aug. 15 news conference that federal land will be opened up for housing construction to address the housing affordability crisis."

The National Association of Realtors reports that as of mid-2023, there is a shortage of 4 million homes in the U.S.

Jim Tobin, president and CEO of the National Association of Home Builders, stated that it is evident that the solution to the crisis requires more construction.

An all-time high for first-time homebuyers is 38 years old. The Federal Reserve has cut interest rates again. Trump has pledged to eliminate taxes on Social Security benefits.

Despite a slight rise in new homes constructed this year, the demand for housing remains high, resulting in a substantial shortage of homes for buyers, according to experts.

The number of single-family housing starts in the U.S. increased by 2.7% in September, reaching a total of 1,027,000 new homes that began construction, as per U.S. Census data.

Experts suggest that while constructing more homes may seem like a straightforward solution to the housing crisis, other commitments made by Trump could hinder affordability efforts.

LendingTree's senior economist, Jacob Channel, stated that enacting a mass deportation of immigrants in the U.S. might increase building costs, as the construction industry heavily relies on immigrant labor.

Although presidents do not control mortgage rates, he claimed that he would lower them to pandemic-era lows.

Experts predict how some of Trump's policies may impact the housing market during his presidency.

1. Deregulation to increase affordability

In his first presidency, Trump signed an executive order aimed at reducing regulatory obstacles to affordable housing across federal, state, local, and tribal levels.

According to Dennis Shea, executive director of the Bipartisan Policy Center's Terwilliger Center, it could serve as a blueprint for the future.

Trump's 2024 campaign advocated for reducing regulations and permit requirements, which experts claim can increase housing costs for buyers.

In a speech at the Economic Club of New York on Sept. 5, Trump stated that they will remove regulations that increase housing costs in order to reduce the cost of a new home by half.

According to Tobin, approximately 24% of the cost of a single-family home and 41% of the cost of a multifamily home are due to regulatory expenses at the local, state, and federal levels.

Reducing the regulatory burden on home or apartment construction will lower costs for consumers, Tobin stated.

2. Impacts on construction workforce

Trump has accused the Biden administration of causing a surge in home prices through illegal immigration, but experts argue that most undocumented immigrants do not own homes.

If a mass deportation were to occur, the homes owned by U.S. citizens would still be occupied, Channel stated.

Tobin stated that housing affordability could be affected by proposals such as mass deportations and stricter border control.

In the U.S., approximately one-third or 31% of construction workers were immigrants, as stated by the NAHB.

The labor market in home construction will experience shock waves if anything disrupts the flow of immigrant labor, according to Tobin.

Experts say that recruiting native-born workers into the construction industry has been challenging.

A 2017 NAHB survey revealed that only 3% of young American adults expressed interest in pursuing a career in construction trades.

A labor shortage in construction can result from a mass sweeping of available workers, which may lead to higher wages. These higher wages are likely to be passed onto consumers through higher home prices, as stated by Channel.

As a result, construction companies will face longer completion times for housing projects, which will hinder efforts to increase supply, he stated.

The industry heavily relies on immigrant labor despite "we are doing a better job" training the domestic workforce through trade schools, apprenticeship programs and other initiatives, Tobin said.

3. Tariffs could hike building costs

Trump has suggested imposing a 10% to 20% tariff on all imports and a rate ranging from 60% to 100% on goods from China.

Experts predict that a blanket tariff of 10% to 20% on raw building materials such as lumber could increase housing costs, including those for home renovations.

Tobin stated that any tariffs that increase product prices will be passed on to the consumer.

According to ResiClub, a housing and real estate data newsletter, the average construction cost for single-family homes is approximately $392,241.

"According to Daryl Fairweather, chief economist at Redfin, the effects of tariffs may vary."

According to Tobin, homebuilders anticipate constructing approximately 1.2 million new single-family homes and 300,000 multifamily units in the upcoming year.

""We're not yet reaching the required pace, but it will be higher than this year," he stated."

It is uncertain whether the Trump administration will prioritize housing costs as much as a Harris administration would have, and the aid Trump has mentioned may not be effective in densely populated areas, according to Fairweather.

She pointed out that Trump's plans to release federal lands for housing mainly focus on rural areas.

Fairweather stated that the solution doesn't benefit densely populated blue cities, which require the most assistance.