On his first day in office, On Monday, President Donald Trump signed a slew of executive orders, including several that would significantly impact the housing cost real estate industry.
Trump said he planned to sign about 100 executive orders in the first days of his second presidency. Three policies are expected to impact the real estate industry.
1. Emergency Price Relief
Under the order titled "Delivering Emergency Price Relief for American Families and Defeating the Cost-of-Living Crisis," Trump is aiming to reduce housing costs and expand the housing supply in the United States.
Specifically, the memorandum calls for:
- Eliminating excess regulations that drive up housing prices
- Promoting careers in skilled trades to address labor shortages
- Fixing material supply chains to reduce construction costs
- Overturning inefficient zoning rules at the local level
- Alleviating permitting roadblocks that slow down development
- Adopting reasonable and cost-effective building codes
- Reducing local impact fees and upfront taxes on housing construction
- Making it easier for developers to finance new housing projects
The aim is to address supply and regulatory issues, both of which contribute to high home prices. If successfully implemented, it could potentially increase the housing supply and drive down prices by up to 10%, according to some estimates, per the Mortgage Point.
Read more: Americans Had To Spend 41.8% of Their Income To Afford a Typical Home in 2024, Study Finds
2. Immigration and Border Security
Several executive orders signed by Trump focus on tightening immigration policies, including:
- Reinstating the "Remain in Mexico" policy for asylum seekers
- Suspending refugee resettlement for at least 90 days
- Deploying military resources to the southern border
According to Housing Wire, these policies could potentially reduce the demand for housing in areas with high immigrant populations. However, they could also impact the amount of construction labor available to builders.
For perspective, it is estimated that over 30% of construction workers in the country are immigrants. The numbers vary depending on specialty. For instance, undocumented migrants make up at least 61% of all plasterers in the US and 52% of roofers.
3. Trade Policies
While not directly targeting real estate, Trump's trade policies, including potential new tariffs, could affect construction costs and material availability. It is worth noting that a 2018 NAHB study found that Trump's tariffs on Canadian lumber increased the cost of building a single-family home by at least $9,000.
