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As President-elect Donald Trump prepares to take office this month, he faces a very different housing market than he did in his first term.
Some of Trump’s other policy proposals threaten to raise the cost of buying a home, as well.
“The big mover in affordability is really mortgage rates,” said Lawrence Yun, chief economist at the National Association of REALTORS®. “If the mortgage rate goes from 7% today, to closer to 6% or lower, that would make a big difference in affordability.”
Trump’s first administration tried — and failed — to privatize Fannie Mae and Freddie Mac, the lending giants that guarantee 70% of America’s mortgages. If he were to renew that fight, that could also cause a hike in mortgage rates, Yun said.
However, the NAR’s Yun believes some of the current pressures on America’s housing market may begin to ease on their own.
Homes are sitting on the market longer, meaning that steeper price cuts may soon be on the horizon — and pending home sales rose for the fourth straight month in December, according to NAR data. Many house hunters are beginning to accept that mortgage rates around 6% are likely here to stay and have stopped delaying their home purchase plans.
“I think the low point in home sales was pretty much done in 2024,” Yun said. “More people will be able to succeed in buying and more people are coming onto the market to list their properties. I think there will be more movement in the housing market this year.”