How Trump’s Win Could Impact the Housing Market

Last week, Donald Trump scored a decisive victory over Vice President Kamala Harris to reclaim the White House, positioning himself to be the 47th President of the United States. Trump became the first man since Grover Cleveland to serve two non-consecutive terms after Cleveland became the 22nd and 24th President.

According to exit polls from virtually every media source, one of the factors that led to Trump’s victory was the economy. It’s certainly no secret that the economy has struggled in recent years as inflation rates continue to soar.

Another contributing factor was the housing market, which has not rebounded since interest rates surged following an extended period of low rates during the COVID-19 pandemic.

Today, the US housing market is in a state of crisis. Not enough new homes are being built, homes that are listed for sale are sitting on the market for months on end, and there simply aren’t enough qualified buyers to keep the market chugging along.

Many would-be buyers, including those who could technically afford higher mortgage rates, have continued to sit on the sidelines waiting for rates to return to normalcy.

Whether it’s completely factual or not, the sitting President typically shoulders much of the blame for the state of the economy during his term. With that in mind, many voters grow disgruntled when facing economic hardships and vote for a candidate who offers a message of hope.

Donald Trump knew this and spent most of his campaign focusing on sharing his plans for the economy, including the housing market. The message resounded with voters who turned out in droves, giving Donald Trump the win in the popular vote by 3.6 million, as well as the electoral college, where Trump picked up 312 votes.

What does Donald Trump’s win mean for the housing market? Find out more about what homebuyers can expect in Trump’s economy and how that shift could impact the economy as a whole.

Did The Housing Market Help Trump Win?

To say that the housing market played a direct role in Donald Trump’s victory in the 2024 Presidential Election would be an understatement.

An NBC study that focused on breaking down voter patterns by county showed that counties across the nation in which housing prices had surged the most over the last four years had the most dramatic shifts toward the Republican candidate.

The top 20% of counties in the US saw a 4.2% shift toward Trump in the election. This was especially true in New Jersey, a state which has historically voted blue for decades. While Harris still won the state’s electoral college votes, the trends that we saw in The Garden State were indicative of voting patterns across the nation.

Trump’s Promises Concerning the Housing Market

Realtor.com, one of the biggest real estate apps in the world, did a deep dive into the promises made by both candidates ahead of the 2024 Presidential Election. While the site pointed out that Kamala Harris had some of the most aggressive plans that the nation had seen since World War 2, Trump’s plans seemed to resound more with voters.

Realtor.com praised Trump’s plans to increase the housing supply by eliminating regulations on housing developments, a plan that the President-Elect said should result in more homes being built. In a time when the United States has one of the greatest inventory shortages in its history, this plan resounded with voters.

The housing market, much like every other part of the economy, operates on the principles of supply and demand. Right now, there is simply not enough supply to meet the demand.

For instance, if there are five houses in the market in a given area but there are 10 buyers, bidding wars break out, resulting in higher prices. Those higher prices impact the costs of homes that are put on the market months later, which forces many would-be buyers to the sidelines.

Inflation and Interest Rates

Another reason for the disparity between the number of homes on the market and the number of qualified buyers is the ongoing war against inflation and interest rates. Much of President Trump’s campaign was built on discussing these problems that are forcing millions of Americans to choose between buying groceries and paying their monthly utility bills.

The soon-to-be President spent much of his campaign talking about his plans to get inflation under control while also bringing down interest rates.

However, it’s worth noting that interest rates have been coming down over the last few months, reaching their lowest point in the last two years recently.

However, President Trump has detailed some aggressive plans that would slash mortgage rates, which would allow buyers who have found the current market untenable to start getting approved for mortgages.

Tariffs on Foreign Goods

The Realtor.com study did highlight some points of Donald Trump’s campaign that may have the opposite effect, though. For instance, President Trump has been vocal about his plans to place tariffs on many foreign-made goods in order to increase American production.

Additionally, he’s been quite vocal about his plans to deport undocumented immigrants, who make up a large portion of the home-building industry, especially in the South and Southwest.

While it’s yet to be seen how those moves impact the housing market, Realtor.com believes that higher tariffs and widespread deportations may have the opposite effect on the housing market, especially if the amount of available labor decreases.

The fear from those who doubt the President-Elect’s plan points to the amount of construction materials that the US currently gets from other nations. If tariffs are placed on these items, some analysts fear that the costs of new constructions will go up.

Additionally, they fear that deporting undocumented immigrants, who the Republican Party says are largely to blame for the shortage, will lead to higher labor costs.

Faced with these questions about his plans, Donald Trump has continued to focus on the plans that would decrease the regulations surrounding home building and remodeling. Much of his campaign was spent focusing on the need for a “smaller government,” an idea that seemed to fly in the face of the Democratic Party’s plans.

By taking permits, which many homebuilders say lead to unnecessarily high costs, out of the equation, the Republicans believe that they can breathe new life into the housing market.

What to Expect in 2025

Based on multiple reports, the President-Elect is spending much of the next two months building the team that will help him carry out his plans for a more “prosperous America.” With that in mind, it’s hard to say for certain what his victory will mean for the housing market.

However, some market analysts, including the leadership team at First Trust Financial, say that they expect refinancing applications to boom in the first months of his second term.

Many of Trump’s plans are still in a state of flux as votes continue to be tabulated for the House of Representatives. In addition to reclaiming the White House, the Republicans gained a majority in the Senate.

As of six days after the election, the Republican Party was only four seats away from taking the majority in the House. With only four seats needed for a majority, the Republicans were leading eight of the races that still needed to be called.

Good News For Homebuyers?

Should the Republicans take the majority in the House and the Senate, President Trump will likely face little to no resistance when it comes to implementing his plans.

Ultimately, that could be very good news for homebuyers who have been waiting for interest rates to drop. The nation saw some record lows during Trump’s previous term. If his plans come to fruition, it’s entirely possible that interest rates drop even further than they have in recent months and the housing inventory will catch back up with the market’s needs.

The highest interest rates of Trump’s previous presidency took place in 2018 when rates reached 4.54%, which is lower than they’ve been during most of Joe Biden’s tenure. In 2017 they were at 4.03% and stayed below 4% during his last two years in office.

Even if the Republicans gain control of every area, it’s unlikely that we will see massive changes to the housing market in the first few months of President Trump’s second term. Instead, it will be an extended process that will likely take until early 2026 to take effect.

However, there is reason for people who have been waiting for the economy to stabilize to buy a home. President Trump proved that his policies were good for housing prices in his first term, and it’s entirely plausible that we’ll see the same results in his second.