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Trump Wants to Push Housing Prices Up 02/09 06:11
WASHINGTON (AP) -- President Donald Trump wants to keep home prices high,
bypassing calls to ramp up construction so people can afford what has been a
ticket to the middle class.
Trump has instead argued for protecting existing owners who have watched the
values of their homes climb. It's a position that flies in the face of what
many economists, the real estate industry, local officials and apartment
dwellers say is needed to fix a big chunk of America's affordability problem.
"I don't want to drive housing prices down. I want to drive housing prices
up for people that own their homes, and they can be assured that's what's going
to happen," Trump told his Cabinet on Jan. 29.
That approach could bolster the Republican president's standing with older
voters, a group that over time has been more likely to vote in midterm
elections. Those races in November will determine whether Trump's party can
retain control of the House and Senate.
"You have a lot of people that have become wealthy in the last year because
their house value has gone up," Trump said. "And you know, when you get the
housing -- when you make it too easy and too cheap to buy houses -- those
values come down."
But by catering to older baby boomers on housing, Trump risks alienating the
younger voters who expanded his coalition in 2024 and helped him win a second
term, and he could wade into a "generational war" in the midterms, said Brent
Buchanan, whose polling firm Cygnal advises Republicans.
"The under-40 group is the most important right now -- they are the ones who
put Trump in the White House," Buchanan said. "Their desire to show up in an
election or not is going to make the difference in this election. If they feel
that Donald Trump is taking care of the boomers at their expense, that is going
to hurt Republicans."
The logic in appealing to older voters
In the 2024 presidential election, 81% of Trump's voters were homeowners,
according to AP VoteCast data. This means many of his supporters already have
mortgages with low rates or own their homes outright, possibly blunting the
importance of housing as an issue.
Older voters tend to show up to vote more than do younger people, said Oscar
Pocasangre, a senior data analyst at liberal think tank New America who has
studied the age divide in U.S. politics. "However, appealing to older voters
may prove to be a misguided policy if what's needed to win is to expand the
voting base," Pocasangre said.
Before the 2026 elections, voters have consistently rated affordability as a
top concern, and that is especially true for younger voters with regard to
housing.
Booker Lightman, 30, a software engineer in Highlands Ranch, Colorado, who
identifies politically as a libertarian Republican, said the shortage of
housing has been a leading problem in his state.
Lightman just closed on a home last month, and while he and his wife, Alice,
were able to manage the cost, he said that the lack of construction is pushing
people out of Colorado. "There's just not enough housing supply," he said.
Shay Hata, a real estate agent in the Chicago and Denver areas, said she
handles about 100 to 150 transactions a year. But she sees the potential for a
lot more. "We have a lack of inventory to the point where most properties,
particularly in the suburbs, are getting between five and 20 offers," she said,
describing what she sees in the Chicago area.
New construction could help more people afford homes because in some cases,
buyers qualify for discounted mortgage rates from the builders' preferred
lenders, Hata said. She called the current situation "very discouraging for
buyers because they're getting priced out of the market."
But pending construction has fallen under Trump. Permits to build
single-family homes have plunged 9.4% over the past 12 months in October, the
most recent month available, to an annual rate of 876,000, according to the
U.S. Census Bureau.
Trump's other ideas to help people buy houses
Trump has not always been against increasing housing supply.
During the 2024 campaign, Trump's team said he would create tax breaks for
homebuyers, trim regulations on construction, open up federal land for housing
developments and make monthly payments more manageable by cutting mortgage
rates. Advisers also claimed that housing stock would open up because of
Trump's push for mass deportations of people who were in the United States
illegally.
As recently as October, Trump urged builders to ramp up construction.
"They're sitting on 2 Million empty lots, A RECORD. I'm asking Fannie Mae and
Freddie Mac to get Big Homebuilders going and, by so doing, help restore the
American Dream!" Trump posted on social media, referring to the
government-backed lenders.
But more recently, he has been unequivocal on not wanting to pursue policies
that would boost supply and lower prices.
In office, Trump has so far focused his housing policy on lobbying the
Federal Reserve to cut its benchmark interest rates. He believes that would
make mortgages more affordable, although critics say it could spur higher
inflation. Trump announced that the two mortgage companies, which are under
government conservatorship, would buy at least $200 billion in home loan
securities in a bid to reduce rates.
Trump also wants Congress to ban large financial institutions from buying
homes. But he has rejected suggestions for expanding rules to let buyers use
401(k) retirement accounts for down payments, telling reporters that he did not
want people to take their money out of the stock market because it was doing so
well.
There are signs that lawmakers in both parties see the benefits of taking
steps to add houses before this year's elections. There are efforts in the
Senate and House to jump-start construction through the use of incentives to
change zoning restrictions, among other policies.
One of the underlying challenges on affordability is that home prices have
been generally rising faster than incomes for several years.
This makes it harder to save for down payments or upgrade to a nicer home.
It also means that the places where people live increasingly double as their
key financial asset, one that leaves many families looking moneyed on paper
even if they are struggling with monthly bills.
There is another risk for Trump. If the economy grows this year, as he has
promised, that could push up demand for houses -- as well as their prices --
making the affordability problem more pronounced, said Edward Pinto, a senior
fellow at the American Enterprise Institute, a center-right think tank.
Pinto said construction of single-family homes would have to rise by 50% to
100% during the next three years for average home price gains to be flat -- a
sign, he said, that Trump's fears about falling home prices were probably
unwarranted.
"It's very hard to crater home prices," Pinto said.
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