Trump's Housing Market Impact: Expert Insights

The 2024 U.S. presidential election has resulted in a Trump victory, raising questions about the potential implications for the housing market. Experts have weighed in on how Trump's policies, including immigration, regulations, and trade, could shape the housing market in the coming years.



1. **Immigration and Housing Demand**

Trump's proposed mass deportation operation could significantly impact the availability of skilled labor in the construction industry. According to Ralph McLaughlin, senior economist at Realtor.com, up to a third of residential construction employment consists of foreign-born workers. Mass deportations would severely hurt the labor supply needed for new home building, potentially exacerbating the housing shortage and driving up construction costs. This could lead to higher home prices and reduced affordability, as fewer homes would be available to meet demand.

Additionally, reduced immigration could lead to a decline in housing demand in the long term, compounding the impact of a low total fertility rate in the U.S. The National Association of Home Builders (NAHB) reports that up to a third of residential construction employment consists of foreign-born workers. A decrease in immigration could severely hurt the labor supply needed for new home building in the short term. In the long term, reducing immigration could lead to negative population growth in the U.S., as the total fertility rate nationally is 1.67, well below the population-sustaining rate of 2.1. This could result in fewer households being formed, ultimately reducing housing demand.



2. **Regulations and Housing Supply**

Trump's plans to cut regulations and open up federal land for building could significantly impact the housing market's supply and affordability. By reducing regulatory burdens, homebuilders could streamline their processes, potentially increasing the supply of new homes. This could help alleviate the current housing shortage, which has contributed to rising home prices. Additionally, opening up federal land for building could provide more space for new developments, further increasing the housing supply. However, it's important to note that while these policies could help increase affordability by addressing the supply shortage, they may not be enough to cut prices in half, as Trump has claimed.

3. **Tariffs and Mortgage Rates**

Trump's policies on tariffs and immigration could have significant impacts on mortgage rates and home prices, according to experts. In the short term, higher tariffs may increase construction costs, leading to higher home prices. However, in the long term, reduced immigration could lead to labor shortages, potentially driving up construction costs and home prices. Additionally, Trump's plans to increase the federal deficit could push up mortgage rates, as investors expect higher borrowing costs for the government's debt.

In conclusion, the Trump presidency could have significant implications for the housing market, with potential impacts on housing supply, demand, and affordability. While some policies, such as cutting regulations, could help increase the housing supply and ease affordability concerns, others, like mass deportations, could exacerbate labor shortages and reduce housing demand. As the Trump administration takes office, it will be essential to monitor these developments and their effects on the housing market.