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.
