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Trump is back, these new real estate measures will affect us!

Zhang

Updated: 1 day ago

Original Dobby Atlanta Life Network January 9, 2025


In the 2024 presidential election, the housing problem in the United States is a top concern for voters, as low inventory continues to push home prices to new highs, making it difficult for ordinary people to live in their desired homes. During his campaign, Trump vowed that if he won the White House, he would do his best to solve the housing problem in the United States. So how would he solve the real estate problem in the United States?


In 2024, the U.S. real estate market is facing multiple severe challenges, including a high interest rate environment, continued housing supply shortages, significant regional market differences, and changes in investor behavior. LiveNOW released its forecast on Trump's plan to alleviate the housing crisis, which involves three measures, including "affordable housing, expanding the Hope for Homeowners program, and incentivizing developers," which are expected to become the incoming administration's top priority.

During Trump's first term, U.S. Housing and Urban Development Secretary Scott Turner was credited with serving as the executive director of the White House Opportunity and Revitalization Council. The council's mission was to coordinate with various federal agencies to attract investment to so-called "opportunity zones," which are economically depressed areas that qualify for federal tax incentives. Experts believe such programs can help ease housing demand and incentivize developers to build more affordable homes for the middle class.

Regulating Wall Street and Lowering Interest Rates


In addition to incentivizing developers to build more affordable homes rather than luxury homes, experts believe the incoming Trump administration will also need to address how Wall Street operates in the housing market. Experts say:


"We have to regulate Wall Street's demand to buy single-family homes as investments. No one wants to live in a place where the average family needs to spend hundreds of thousands of dollars to own a home."


So another key factor that the Trump administration must coordinate is interest rates.

Expanding HUD's Programs


The Department of Housing and Urban Development is not only responsible for addressing the nation's housing needs, but also for enacting fair housing laws and seeking to provide housing for the poor, providing homes for more than 4.3 million low-income families through public housing, rental subsidies and voucher programs. The agency has a budget of tens of billions of dollars and runs numerous programs, from reducing homelessness to promoting homeownership. It also funds the construction of affordable housing and provides vouchers so low-income families can afford housing in the private market. Therefore, expanding the range of people who are eligible for HUD loans to buy homes may be an area where the Trump administration can take the lead.



Predicting the trajectory of mortgage rates is difficult because rates are influenced by many factors, from government spending and the economy to geopolitical tensions and stock and bond market volatility. Before the election, housing economists generally expected rates on 30-year mortgages to fall to around 6% by the end of 2024, and then ease further in 2025. Now, economists at the Mortgage Bankers Association and Realtor.com expect average rates to hover around 6% in 2025, while economists at First American say a drop to around 6% is possible but not certain. The National Association of Realtors estimates that the average rate on a 30-year mortgage would fluctuate between 5.5% and 6.5% during a second Trump term. "If the Trump administration can come up with a credible plan to reduce the budget deficit, then mortgage rates could fall," said Lawrence Yun, chief economist at the National Association of Realtors. But don't expect mortgage rates to return to the lows reached during Trump's first term (2021-2016). At the time, the average annual rate on a 30-year mortgage ranged from a record low of 2.65% to 4.94%. Mortgage rates fell sharply in the final year of Trump's first term as the economic impact of the coronavirus pandemic led investors to seek the safety of U.S. government bonds, causing their yields to fall sharply.

In summary, the return of Trump 2.0 will have a complex and far-reaching impact on the US real estate market. Although his policies may promote the growth of real estate demand in some aspects, they may also cause market imbalances and potential risks. Therefore, developers, investors and policymakers need to pay close attention to market dynamics, respond flexibly to future challenges, and ensure the healthy and stable development of the real estate market.

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