{"id":21928,"date":"2026-01-27T11:49:29","date_gmt":"2026-01-27T11:49:29","guid":{"rendered":"https:\/\/businessprofittoday.com\/index.php\/2026\/01\/27\/why-trumps-housing-market-initiatives-wont-help-much-in-the-long-run\/"},"modified":"2026-01-27T11:49:29","modified_gmt":"2026-01-27T11:49:29","slug":"why-trumps-housing-market-initiatives-wont-help-much-in-the-long-run","status":"publish","type":"post","link":"https:\/\/businessprofittoday.com\/index.php\/2026\/01\/27\/why-trumps-housing-market-initiatives-wont-help-much-in-the-long-run\/","title":{"rendered":"Why Trump\u2019s housing market initiatives won\u2019t help much in the long run"},"content":{"rendered":"
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US President Donald Trump has made housing affordability a centrepiece of his economic agenda, recently announcing policies designed to increase homeownership.<\/p>\n

From restricting institutional investors from buying residential properties<\/a> to urging \u201cFannie Mae\u201d and \u201cFreddie Mac\u201d to buy billions in mortgage-backed securities, the administration has leaned on aggressive measures to ease costs.<\/p>\n

However, these efforts are unlikely to deliver lasting relief to the housing market, Jake Krimmel, a senior economist at Realtor, told CNBC in an interview this week.<\/p>\n

Why Trump\u2019s initiatives are short-term fixes only<\/h2>\n

Krimmel isn\u2019t particularly excited about Trump\u2019s recently announced housing initiatives as they\u2019re \u201cshort run\u201d only \u2013 not long-term solutions to the deeper structural issues troubling that market. <\/p>\n

According to him, the ban on institutional investors or encouraging government-backed entities to absorb mortgage securities may boost demand in the near-term, but these policies won\u2019t address the fundamental shortage of housing supply.<\/p>\n

\u201cI\u2019d love to see more potentially long-run supply side solutions, not just ones to stimulate demand,\u201d the economist explained, adding that without a significant increase in construction, affordability will remain a challenge.<\/p>\n

Demand-side policies can temporarily stimulate activity, but they risk inflating prices even further, leaving first-time buyers hardly any better off in the long run.<\/p>\n

Federal policy alone won\u2019t solve the crisis<\/h2>\n

On \u201cSquawk Box\u201d, Jake Krimmel acknowledged the fragmented nature of the US housing market as another major challenge.<\/p>\n

\u201cHousing market isn\u2019t a national market,\u201d he argued, pointing to massive differences in affordability and supply-demand dynamics across regions.<\/p>\n

Northeast and Midwest \u2013 for example \u2013 face tight inventories and constrained construction, while the South and West grapple with affordability pressures despite more active building.<\/p>\n

Therefore, federal policies alone can\u2019t uniformly resolve these divergent crises. <\/p>\n

Local governments must step in with tailored initiatives like zoning reforms, incentives for builders, or \u201csubsidies\u201d for affordable housing projects.<\/p>\n

Without regional alignment, national measures risk being blunt instruments that fail to address the nuanced realities of local housing markets.<\/p>\n

Rate cuts could unlock inventory \u2013 but at a cost<\/h2>\n

One of President Trump\u2019s most vocal demands has been for lower interest rates<\/a>, pressuring the Federal Reserve to act.<\/p>\n

Mortgage rates currently hover around 6.2%, and a drop to 5.5% could meaningfully shift the market. <\/p>\n

\u201cIf rates come down, that\u2019s going to push some first-time home buyers into the market for sure,\u201d Krimmel noted.<\/p>\n

Lower borrowing costs would ease the \u201clock-in effect,\u201d encouraging homeowners with higher-rate mortgages to sell and freeing up inventory.<\/p>\n

However, the benefits come with risks: cheaper financing could reignite price growth, undermining affordability gains. <\/p>\n

So, the net impact would depend on whether increased liquidity outweighs the upward pressure on home values.<\/p>\n

All in all, Trump\u2019s housing policies may spark short-term relief, but lasting affordability demands deeper supply-side and local reforms.<\/p>\n

The post Why Trump\u2019s housing market initiatives won\u2019t help much in the long run<\/a> appeared first on Invezz<\/a><\/p>\n

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