Tough housing market expected under second Trump term: 'Mortgage rates likely to rise'

11 November 2024

During his 2024 campaign, Donald Trump blamed Democrats, the Biden Administration and Vice President Kamala Harris for — among many other things — the high cost of housing.

Inflation was a prominent theme in Trump's campaign, including housing costs.

Trump enjoyed a decisive victory over Harris on Election Night and will return to the White House on January 20, 2025.

According to Newsweek's Giulia Carbonaro, would-be homebuyers are likely to face a difficult market during Trump's second term.

"The lack of affordability in the U.S. housing market has been a major issue during this election cycle and one that both candidates tried to address in their agenda, though in significantly different ways," Carbonaro reports in an article published on November 11. "While Kamala Harris promised to build millions of homes, offer financial aid to first-time buyers, and ease regulations on building, Trump suggested that through reducing illegal immigration, he could free millions of homes for American citizens, reducing demand on the supply-tight market."

Real estate experts interviewed by Newsweek, according to Carbonaro, predicted that "mortgage rates are likely to rise in the short."

Lawrence Yun, chief economist and senior vice president of research at the National Association of Realtors (NAR), told Newsweek, "In the short run, mortgage rates could rise due to less focus on budget deficit and extending and expanding tax cuts."

Chen Zhao, director for economic research at Redfin, believes Trump's immigration policies could lead to higher housing costs.

Zhao told Newsweek, "Similarly, if construction labor costs increase because there are fewer construction workers because of immigration restrictions, the cost of building a home will also increase. Whether those increases are passed on to home prices depends on market conditions. It may just be that builders build less."

Read Newsweek's full report at this link.

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