- Home prices have surged 47% since 2020, creating affordability struggles for buyers.
- The U.S. housing market faces a 5.5 million home shortage, fueling high demand and competition.
- Potential HUD and FHFA changes could expand loan accessibility but may pose financial risks.
- Deregulation could ease mortgage approval and lower costs but might also increase financial instability.
- Reducing tariffs on building materials could cut construction costs, improving housing affordability.
Former President Donald Trump has issued an executive order aimed at providing emergency price relief in the housing market. This order intends to tackle rising housing costs by increasing supply, easing affordability concerns, and reforming housing market policies. But will these measures actually bring relief to homebuyers and investors, or could they introduce new risks? Let’s examine the potential impact.
The Housing Market’s Current Struggles
The U.S. housing market is facing several urgent challenges that have made homeownership increasingly difficult for millions of Americans.
Home Prices Outpacing Wages
Housing costs have dramatically increased in recent years. According to the National Association of Realtors (NAR), median home prices have surged 47% since 2020, while wages have not kept up. This significant price spike means that many Americans are being priced out of homeownership.
Key Factors Driving Price Increases:
- Low housing inventory – Demand still outstrips supply, fueling bidding wars.
- Inflation – Rising costs of goods and services lead to higher interest rates.
- High interest rates – Mortgage rates have hovered near historic highs, reducing affordability.
Severe Inventory Shortages
The U.S. Department of Housing and Urban Development (HUD) estimates that there is a national shortage of 5.5 million homes. This lack of available housing intensifies competition, drives prices higher, and forces many would-be buyers to remain renters.
HUD’s Role in Implementing the Housing Order
Trump’s housing market policies could result in significant changes at HUD, particularly with affordable housing programs. These reforms could target affordability by expanding financial assistance to homebuyers and reducing barriers for developers.
Potential HUD Policy Changes:
- FHA Loan Expansions – Increasing loan limits and eligibility to help first-time buyers.
- Down Payment Assistance – Expanding government programs to lower upfront costs for buyers.
- Affordable Housing Incentives – Offering subsidies or tax breaks to developers for building lower-cost homes.
If these changes are successfully implemented, they may increase homeownership rates for lower-income buyers. However, a key concern is whether these efforts will go far enough to meaningfully solve the housing inventory crisis.
Mortgage Market Changes Through FHFA
The Federal Housing Finance Agency (FHFA) plays a critical role in regulating mortgage lenders such as Fannie Mae and Freddie Mac. Trump’s housing market policies could push FHFA to take a more aggressive stance in making homeownership more accessible.
Possible FHFA Reforms:
- Loosening lending standards – Easing credit and underwriting policies to allow more Americans to qualify for mortgages.
- Lowering interest rates for borrowers – Government-sponsored enterprises (GSEs) may be instructed to offer special rate programs.
- Flexible mortgage qualification rules – Allowing higher debt-to-income ratios or alternative documentation for applicants.
Potential Impact:
While these changes could enable millions more Americans to access home financing, they also carry financial risks. Lessons from the 2008 housing crisis suggest that relaxing lending requirements can create market instability if risky loans are issued without proper safeguards.
Potential CFPB Deregulation and Mortgage Lending
Trump has long favored financial deregulation, including policies that would reduce industry oversight by agencies such as the Consumer Financial Protection Bureau (CFPB). This could have major implications for the mortgage market.
Potential Changes With CFPB Deregulation:
- Faster mortgage approvals – Less red tape could result in quicker closings.
- Reduced restrictions on lenders – Banks and financial institutions could offer a wider variety of loan products.
- Increased competition in mortgage lending – More market players might offer alternative financing, potentially reducing mortgage costs.
Risks of CFPB Deregulation:
- Rise in predatory lending – Fewer regulations could lead to unfair or risky loan terms.
- Higher foreclosure rates – Easier credit access might encourage some buyers to take on unaffordable loans.
- Systemic financial risks – If lending becomes too lax, a real estate market bubble could form.
For homebuyers, particularly first-time buyers, reduced safeguards could make the mortgage process smoother but also introduce vulnerabilities.
Could Tariff Policies Affect Housing Prices?
The cost of new homes is directly tied to construction materials, and tariffs on essential supplies like lumber and steel play a big role in pricing.
The Impact of Tariffs on Housing Prices:
- Material Costs Are High – The National Association of Home Builders (NAHB) estimates that tariffs have added an average of $24,000 to new home prices.
- Supply Chain Issues Persist – Even if tariffs are adjusted, global supply shortages may keep costs elevated.
- Labor Shortages Add to Costs – A limited workforce in construction further delays projects and increases expenses.
If Trump’s housing order includes tariff reductions, material costs could drop, making home construction more affordable and potentially easing prices for buyers. However, it remains to be seen how much of an impact these policy shifts could have on an already strained supply chain.
How Will Las Vegas Real Estate Be Affected?
The Las Vegas real estate market has seen significant price gains and inventory issues in recent years. If Trump’s emergency price relief efforts succeed, some effects in Las Vegas might include:
- More housing construction – Regulatory rollbacks could encourage more developments.
- Increased loan availability – Looser mortgage standards may make buying easier for first-time homebuyers.
- Risk of market overheating – If demand spikes too quickly, Las Vegas could see another real estate bubble.
Investors and homebuyers in Las Vegas should carefully monitor these policy developments to determine whether they will create meaningful long-term affordability improvements.
Risks of Deregulation in Housing Policies
While deregulation might make homeownership easier and more affordable, it also introduces potential financial instability. The 2008 financial crisis was fueled by risky lending, speculation, and minimal oversight.
Potential Dangers of Housing Market Deregulation:
- Speculative Buying Increases – Investors may flood the market, outbidding regular homebuyers.
- Home Price Inflation – If demand surges without sufficient supply expansion, prices could rise even higher.
- Foreclosure Risks – Looser lending standards could push buyers into mortgages they cannot afford.
The key challenge policymakers face is ensuring housing remains accessible without compromising market stability.
What Homebuyers and Investors Should Consider
If Trump’s housing market policies and emergency price relief efforts take effect, buyers, investors, and sellers should consider their strategies carefully.
Key Considerations:
- For Homebuyers – Looser lending standards may improve accessibility, but budgeting responsibly is critical.
- For Investors – New housing construction could slow appreciation rates, impacting short-term profits.
- For Sellers – Policy shifts may create volatility, impacting when and how to sell effectively.
Staying informed and working with knowledgeable real estate professionals will be crucial in navigating these market changes.
Final Thoughts
Trump’s housing order aims to lower housing costs by tackling affordability challenges, increasing supply, and modifying housing market policies.
While efforts such as HUD reforms, FHFA lending adjustments, and tariff reductions could help ease some affordability pressures, deregulation carries risks. The true impact of these policies will depend on their execution and whether long-term affordability solutions are achieved rather than just short-term fixes.
For homebuyers, investors, and sellers, the next few years could bring both opportunities and risks. Remaining engaged with market trends and making well-informed financial decisions will be key to successfully navigating the evolving housing landscape.