The Affordability President
This'll help those approval numbers...
While there is likely some nuanced message to be sent about wanting current homeowners not to lose value while making housing more affordable overall, that’s not what he said. I will admit he kind of sort of said something to that effect, but mostly he seemed to focus on wealth and asserting that people who don’t work hard enough don’t deserve to own a home.
Just from a pure politics POV, this isn’t going to help his approval numbers nor the GOP at the mid-terms given.
It’s not just me noting this. Here’s Michael Brendan Dougherty at NRO: Higher House Prices?
Investiopedia notes, Trump Wants Lower Mortgage Rates, Not Cheaper Houses and quotes the clip from above.
“I am very protective of people that already own a house,” Trump said. “Because we have had such a good run, the house values have gone up tremendously, and these people have become wealthy.”
I am a big proponent of home ownership, and I think that it is a useful tool in many (but not all) circumstances for building personal wealth, but I don’t think that Trump thinks that a couple making $80k a year buying a modest three-bedroom home is “wealthy.”
Moreover, keeping housing costs high, even with lower interest rates, makes things more difficult for such a couple.
In his speech last week to the World Economic Forum in Davos, Trump said that adding housing supply would lower home prices and disrupt the market by eroding the housing wealth that many homeowners have accumulated since values soared after the pandemic. However, he said that lower interest rates were “good for everybody.”
“This suggests that the administration sees lower mortgage rates as the preferred channel through which to improve affordability,” wrote Wells Fargo economists Charlie Dougherty and Ali Hajibeigi.
The problem is, of course, that there is a supply problem as well. And there is the pesky problem that lowering interest rates too much can trigger inflation, which would then make housing more expensive.
Lowering interest rates won’t solve the problem of young members of the middle class not being able to purchase a home. Lower interest rates and prices will go up. We’ve been experiencing the converse of this in the past couple of years as mgt interest rates have risen, house prices have stagnated. Even with the fairly weak inventory levels of houses for sale, price reduced notices are common. There needs to be an increase in housing stock and moderate interest rates.
Once again, Trump shoots from the hip with not a moment’s thought about what comes next. And, as usual, he equates money with intelligence and industriousness. All poor people are, disptick facto, dumb and lazy, while nepo baby grifters (like Don Jr.) are simply brilliant, and being justly rewarded by Mamon.
Someone in his circle of trust must have made a comment about too much supply driving down the value of their home…I just cannot fathom how tone-deaf this statement was, from the “protecting the wealthy” to the “people who haven’t worked hard” portion of the comment.
It’s bizarre.
The effects of distortions in the housing market are having real, long-term impacts. We bought our house in 2015, and the value has more than doubled (up 116%). That’s not normal, but it is the result of: low new housing builds (building all but stopped in 2008 when the market crashed and never really returned to those levels of building), decrease in available land (we are protecting vast areas in land trusts), high demand from neighboring states (as much as our houses cost, they are more expensive in MA), high materials and labor costs, lack of available labor, short season for outdoor work, etc., etc., etc. I don’t know if private equity is buying up homes here too, but if so, add that to the messy mix.
Property values have soared, and in a state that relies heavily on property taxes to fund everything, older people and low-income people are struggling. This is playing out in towns across NH right now, and it’s a real problem.
There is no magic wand to make this all go away. It’s going to have to be a series of fixes and changes that are locally focused, and it will take YEARS. Dropping mortgage rates could make things worse in some areas.
@Sleeping Dog:
Besides the barrier to lower mortgage interest rates are his own economic policies. A weak dollar, unsustainable federal debt and policy chaos are all reasons that lenders (or bond buyers) will demand higher rates of return, i.e. interest rates.
@Sleeping Dog: Trump likes a weak dollar.https://www.npr.org/2026/01/30/nx-s1-5693025/trump-dollar-economy-markets