Trump’s housing market conundrum

As President-elect Donald Trump prepares to take office this month, he faces a very different housing market than he did in his first term.

As President-elect Donald Trump prepares to take office this month, he faces a very different housing market than he did in his first term. A sharp decrease in home affordability over the last four years has stung for many Americans — and Trump won his bid for US president partly on the back of dissatisfaction with the economy. Now Trump, a billionaire property developer himself, faces a housing conundrum: Mortgage rates aren’t falling, and home prices are expected to continue rising over the next few years. Many economists estimate that this year’s housing market will not look dissimilar to the frozen-in-place housing market of the last few years. At the same time, many of Trump’s proposed policies, including tariffs and mass deportations, could potentially exacerbate America’s home affordability woes. The standard 30-year fixed mortgage rate, the most popular home loan option, was just below 2.8% when Trump left office in January 2021 during the pandemic. Last week, it was 6.91%. That means people who borrow money to buy a home must now pay hundreds, or even thousands, more per month than if they had bought a home for the same price four years ago. Home prices have also risen significantly since then. From January 2021 through October 2024, the latest data available, national home prices have jumped 37%, according to the S&P CoreLogic Case-Shiller Home Price Index. “I see very little reason the housing market will get better this year,” said Jim Parrott, a nonresident fellow at the Urban Institute and a former senior adviser at the National Economic Council.