The debate on incoming President Donald Trump’s policies on the U.S. housing market continues to gain momentum as his inaugural day draws near. While Trump has promised to make housing in America more affordable, experts and analysts remain divided on the actual impact the changing regulations could have on the market. Understanding the expected policy changes could help us gain insights into whether they will be a boon or a bane for fractional housing platforms such as Arrived.
Importantly, experts predict that home prices will remain at nearly the same levels as in 2024, with mortgage rates dropping to around 6% from the 6.9% recorded last week. Their comments show that housing affordability will continue to remain a challenge for many American home buyers unless there are drastic reductions in inflation and significant improvements in salaries.
Understanding Trump’s Expected Policy Changes
Trump is expected to end the housing affordability challenge in the U.S. by focusing on reducing both the inflation and mortgage rates. He plans to send back the millions of illegal immigrants who increase the demand for houses in the U.S., when supply is already low. Additionally, he aims to cut the federal regulations on homebuilders that drive up costs. On the other hand, Trump could impose broad-based tariffs to discourage imports of input materials from China. Plus, there could also be the possibility of privatizing Fannie Mae (FNMA) and Freddie Mac (FMCC), which Trump had tried to undertake during his earlier term as President.
Now, let’s understand the positive and negative implications arising from these.
- Deporting Illegal Immigrants – Deporting illegal immigrants could be a good policy per se if viewed only from the perspective of housing demand amid constrained supply. However, home builders believe that it is this very immigrant community that constitutes a chunk of cheap labor for the industry. Absent this, home building and, hence, home supply could take a step back, making homes more expensive.
- Imposing Tariffs – Coming to the broad-based tariffs agenda, imposing tariffs on imports from China could significantly increase the costs of building materials. Since most of the materials are imported from China, tariffs could lead to an unintended increase in home prices.
- Deregulation – Next is the easing of federal regulations on property developers. Trump, who was also a property market stalwart, faced severe additional costs on his projects owing to the regulations and permit requirements. These costs are ultimately passed on to the home buyers, making houses pricier. Cutting down regulations could be favorable for the housing market. Having said that, most of the regulations come from the local state laws and not federal laws. In the meantime, Trump has vowed to establish low-tax zones on federal lands to encourage home construction. This could be a catalyst for cheaper housing construction.
Here’s How Trump’s Policies Could Impact Arrived
Whether or not Trump imposes these policies and to what extent they could impact the housing market remains to be seen. In the case of Arrived, an investment platform for residential homes and vacation rentals, investors could still invest in properties via the fractional ownership structure. Also, investors can invest with a minimum amount of $100, making it an even more attractive investment option.
To summarize, Trump’s planned policy changes will surely have at least some positive impacts on the housing affordability index in the U.S. Arrived can surely leverage both kinds of situations to its benefit with its unique offerings and dividend-paying ability.
This article was written in partnership with Arrived. TipRanks may be compensated for its publication.