What Does Trump’s New Administration Mean for the Real Estate Market?

With Donald Trump officially taking office, discussions about the potential impact of his administration on the real estate market are heating up. Trump’s campaign promises included bold claims about tackling the housing affordability crisis, but what might these changes mean for the market in 2025? Here's a closer look at what lies ahead.

Promised Changes and Market Realities

Mortgage Rates and Affordability

Trump’s team has emphasized plans to combat inflation and reduce mortgage rates, which they claim would make housing more affordable. However, interest rates are influenced by a variety of factors beyond presidential policies. As of January 2025, 30-year fixed mortgage rates hover around 6.9%, with some predictions suggesting they may rise further, potentially reaching 8% by spring. While affordability remains a critical issue, there is skepticism about whether Trump’s administration can directly influence mortgage rates.

Regulatory Changes and Construction Costs

One of Trump’s key promises involves rolling back federal regulations that increase housing costs. A 2021 study by the National Association of Home Builders found that regulations added nearly $93,000 to the average price of a new home. Reducing these costs could make new construction more affordable. However, many regulations are set at the local level, which could limit the federal government’s influence.

Trump also pledged to open portions of federal land for housing construction with ultra-low taxes. While this could theoretically increase housing supply, much of the federally owned land is in remote areas with limited infrastructure, which would require significant investment to support new communities.

Immigration Policies and Housing Market Impact

Proposals to ban mortgages for undocumented immigrants and deport millions could have ripple effects on the housing market. While such measures aim to lower housing prices by reducing competition, undocumented workers play a significant role in the construction industry. Policies restricting their presence could exacerbate labor shortages, driving up construction costs and slowing new home development.

What Lies Ahead?

Despite Trump’s promises, the housing market is unlikely to experience dramatic improvements in affordability anytime soon. Mortgage rates are expected to remain elevated, and home prices are stabilizing rather than dropping. This creates a challenging environment for buyers, but it may benefit those prepared to navigate higher costs with less competition.

Life events such as marriages, births, divorces, and job relocations will continue to drive demand for housing, keeping the market active even in a high-rate environment. For those looking to buy or sell, staying informed about market conditions will be key to making strategic decisions.

KeyPoint

While some of Trump’s proposed policies could lead to incremental improvements in housing affordability, many are met with skepticism regarding their feasibility and effectiveness. For now, buyers and sellers should brace for a market where affordability remains a challenge, but stability provides opportunities for those ready to act.

If you're planning to relocate or navigate the housing market in 2025, staying informed about local conditions is crucial. Buyers who are well-prepared can still find opportunities, even in a challenging market.