4 Changes That Could Be Coming to Housing Prices Now That Congress Is Republican
Written by
Terence Loose
Edited by
Zuri Anderson
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
It’s no secret that housing prices have been rising, and rising a lot, over the past few years. In fact, according to the Federal Reserve, the median price of a home in the third quarter of 2024 stood at $420,400 — up from $327,900 in the same quarter of 2020.
With the interest rates rising alongside them, it’s no wonder many Americans see homeownership as out of reach.
President-elect Trump promised his policies would fix that and give people hope in the American Dream again. Only time will tell if that’s true, but here are four policies that could affect housing prices in dramatic ways.
Broad Tariffs
It’s no secret that Trump is a fan of tariffs. On the campaign trail in Flint, Michigan this September, Trump said “Tariffs are the greatest thing ever invented.”
Well, many economists would beg to differ, arguing that they are actually an import tax that gets passed onto the consumer, inflating the price of goods. In fact, the Tax Foundation estimates that a 10% broad tariff would cost each American household, on average, $1,253 per year. A 20% tariff would cost them $2,045.
When it comes to housing, tariffs could impose an import tax on building supplies. This cost to builders would be passed onto new home buyers. There is precedent for this theory.
During Trump’s first term in office, he imposed tariffs on Canadian softwood imports that the National Association of Home Builders claimed raised the cost of single-family home by approximately $9,000.
“The most likely impact of tariffs would be to add to the cost of housing at a time that affordability is really a challenge,” Mike Fratantoni, chief economist at the Mortgage Bankers Association (MBA), told HowsingWire.com.
Lower Interest Rates
Trump has promised to lower interest rates, but these, especially mortgage interest rates, are not directly under the control of the president.
They depend, in part, on the federal funds rate that the Federal Reserve sets. And whether the Fed lowers or raises rates is dependent on how they assess the state of the economy.
So, in yet another example of how one policy can have ripple effects through various sectors, if Trump imposes broad tariffs and that spurs another round of inflation, the Fed could raise rates again.
But this is a true unknowable, as verified by the Fed chair himself, Jerome H. Powell, after the Fed’s early November session.
“The answer isn’t obvious until we see actual policies — and even then it’s not obvious,” Powell said, per The New York Times.
Cutting Regulations
On the campaign trail, then-candidate Trump promised to cut regulations. And since this is a Republican mantra, and he has an all-Republican Congress, it’s a fair bet this will happen. It’s even in his official platform, Agenda 47.
Trump believes this would lower the price of housing. According to a Newsweek article, Trump has said he will remove what he sees as unnecessary housing development regulations that add $90,000 to the price of a new home.
Is that number accurate? And will it be enough to offset the added cost to building supplies that tariffs impose? It’s impossible to say.
However, many analysts have noted that builders are anticipating the Trump win to be a win for them, as well.
“We are already seeing very active developers lining up their next investment, as there will be many incentives coming down the pipeline given this strong Republican representation,” said Hans Ingram, a project manager with New York’s JSM Project Management.
He did add the caveat, however, that when it comes to the long term, he isn’t so sure which way things will turn since the U.S. housing market is so dependent on both domestic and world affairs.
Mass Deportations
On Nov. 17, on Truth Social, Trump verified that he plans to declare a national emergency and activate the military to carry out his mass deportation plans, which ranks second on his Agenda 47.
Trump has claimed that, among other things, immigrants are the cause of the housing crisis. Many economists disagree.
And while his mass deportation policy is still a big if, if he succeeds, many say it could backfire and actually cause housing prices to increase. This is due to the large percentage of immigrants who work in the construction industry, often for less-than-market wages.
More than one-third of construction workers in the labor force are foreign-born, according to the US Census Bureau’s 2023 American Community Survey, as reported by CNN.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
More From GOBankingRates
