President Trump’s discussion on housing affordability mirrors previous statements on maintaining housing value.
On Tuesday night Trump’s state of the union speech which lasted an hour and 47 minutes, touched heavily on the housing affordability crisis. Much of the conversation ran closely to his executive action that was introduced in January. Trump increased past rhetoric of lower interest rates to aid buyers while protecting sellers — a sentiment that has since been put into action with the deliberate lowering of mortgage rates. As reported on by realtor.com, the average mortgage rate in January of 2025 was 7.04% while now that rate sits at 6.01%.
A reinforced stance on institutional investors
Trump stood by his executive order previously signed that aimed at blocking institutional investors from buying single-family homes.
Further, he pushed for this executive ban to garner legitimacy through congressional action. The Housing for the 21st Century Act is now in the Senate, however, the addition of investor bans has yet to be added.
Many Americans still believe homeownership is essential to the American dream. However, Jake Krimmel, senior economist at realtor.com, still pushes “large institutional investors represent a relatively small share of the national housing stock, and because their activity is often highly localized, it remains an open question whether banning new purchases would meaningfully shift metro-level markets.”
With the need for affordable housing yet Trump’s resistance to lowering home value, could this be a sort of compromise? And more importantly, is this compromise likely to bring a significant difference to the housing market?
A new aim at the construction industry
Another discussion Trump opened up since the supreme court recently struck down most of the tariffs that have had a significant impact on the cost of building material. In fact, he further defended these tariffs by citing how the construction industry contributes $2 trillion to the economy, thus the tariffs would aid the prosperity of our economy.
As stated by President Trump, “As thousands of new businesses are forming and factories, plants, and laboratories are being built, we have added 70,000 new construction jobs in just a very short period of time.”
Home construction in itself will not “fix” the housing affordability crisis, however it may provide some relief. Nonetheless , it remains unclear whether new construction would harm home value as more supply enters the market.
The future of housing affordability
As touched on by economists, institutional investors take up a small share of home ownership, therefore the trickle-down effect of how this issue may be more limited than anticipated.
Although this, coupled with new development, lower interest rates, and the direct lowering of home energy costs, which was expressed during the address, buyers could see some possible relief in the years to come.
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