Housing is the biggest expense for most people, and right now, according to housingwire.com, affordability is at its worst level in over 30 years. Inventory is low, mortgage rates have doubled, and for many, the real question isn’t "Where should I live?" but "Can I even afford to move?" I have many clients who purchased their homes with mortgage rates between 2.75% and 3.25% and a few have told me that they will never move because even if they cashed out all of the equity they have achieved over the past 5-7 years and invested it into a newer home, they would have a higher monthly mortgage payment than they do now!
During his campaign, Donald Trump made housing one of his key talking points. Now, as President, he’s introduced a proposal aimed at tackling a problem that every administration before him has struggled to solve—even his own previous term. The plan focuses on three major changes:
Cutting federal regulations
Relaxing building codes
Unlocking government-owned land for development
If successful, this could lead to the construction of up to 4 million new homes and improve affordability. But how realistic is this plan? Will it make a difference? Let’s break it down.
The Housing Market Is Broken— It Impacts Everyone!
To understand the proposed reforms, we need to look at how we arrived here. The 2008 financial crisis led to a major correction in housing prices, making homeownership more accessible due to short sales and foreclosures that dropped values across the country. However, it also scared homebuilders away from new construction. Even 17 years later, we still haven’t returned to pre-crash building levels.
When COVID hit in 2020, the perception and uncertainty in the market made construction even worse. Mortgage rates dropped to historic lows, home prices skyrocketed, and millions of homeowners locked in 2–3% rates that they now can’t afford to give up. Economists call this the "lock-in effect” - people aren’t selling because taking on a new mortgage at today’s 7% rates would mean a massive increase in monthly payments.
Meanwhile, builders face rising material costs, labor shortages, and zoning restrictions that make affordable housing unprofitable to construct. As a result, the housing shortage has only deepened.
Here’s where things stand:
76% of Americans say housing affordability is a growing problem (source).
Builders are producing fewer homes than in 2006 because affordable homes aren’t profitable.
Homeowners remain "locked in" because moving would mean significantly higher mortgage payments.
Trump’s plan aims to shake things up, but will it work?
Trump’s Strategy to Reduce Housing Costs
The proposal focuses on three main strategies, but the third one is likely the most impactful:
1. Loosening Building Codes
Right now, federal mortgage programs require new homes to meet strict energy-efficiency standards. While these upgrades save money over time, they can add up to $31,000 per home in upfront costs, according to the National Association of Home Builders. This includes high-efficiency appliances, HVAC systems, and insulation.
While I’m all for sustainability, there’s a difference between incentivizing it and making it mandatory. The reality is, these requirements make new homes more expensive, and Trump’s plan suggests revisiting these mandates to lower costs.
2. Cutting Regulations
Regulations make up 23.8% of the cost of a single-family home.
For multifamily units, it’s even worse—40.6% of the cost is from regulations.
A lot of these regulations come from layers of federal, state, and local red tape—zoning laws, permitting delays, environmental reviews, and more. Trump’s team argues that reducing regulatory barriers on financing, permitting, and approval processes could make it easier to build affordable housing.
However, some of Trump’s other policies—like tariffs on Canadian lumber and tighter immigration laws—could increase construction costs, potentially canceling out any savings from deregulation.
3. Building on Federal Land
The government owns 28% of all land in the U.S., and Trump’s plan proposes unlocking "surplus" land for housing development. The American Enterprise Institute estimates this could lead to 3–4 million new homes, particularly in states like Nevada, Arizona, and Utah.
The problem? Most of this land is in remote areas with no infrastructure—no roads, no utilities, nothing. According to the Wall Street Journal, only 7.3% of federal land overlaps with existing cities, meaning most of it won’t help where housing demand is highest.
How Long Will This Take – Will It Even Work?
Let’s say this plan does pass. What then? The reality is, new home construction takes time. Builders typically plan projects 12–24 months in advance, meaning even under perfect conditions, we wouldn’t see meaningful supply increases for 2–3 years.
In the short term, affordability might improve not because of lower home prices, but because of falling mortgage rates. For example:
A $500,000 loan at 7% costs $3,300/month.
The same loan at 3.5% costs $2,200/month.
That’s a 33% drop in monthly payments—without home prices changing at all. This is why lower mortgage rates have a bigger impact on affordability than price reductions alone.
Is This Plan Realistic? And Who Will See Its Potential Rewards?
Here’s my honest take: Some of Trump’s proposals could help, but they aren’t a silver bullet. The U.S. has a shortage of 2.5 to 7.2 million homes, according to Realtor.com’s chief economist. Deregulation alone won’t solve the core issue—people don’t want to move, and builders don’t have enough incentive to construct affordable homes.
Here are three ideas I think could make a bigger impact:
Mortgage Portability – Let buyers transfer their low mortgage rate to their next home. If I could keep my current rate when moving, I’d be far more likely to sell. I would love to see this, but with a background in banking and lending, I cannot see lending institutions doing this – there is no incentive for them and ultimately, they would lose money.
Faster Permitting – Cut local red tape to speed up construction timelines. This could be a game-changer. When I built my last home, any time we had an inspector come to the home and request a change, it added 1-3 weeks in lost time just to get them back to the property. Additionally, it cost me thousands of dollars in interest because we had to wait for a new visit.
Raise the Capital Gains Exclusion – Make it easier for sellers to move without a massive tax bill. Raising the exclusion from $500K to $1M for married couples could incentivize more homeowners to list their properties.
These types of incentives wouldn’t just help existing homeowners—they’d also increase inventory and reduce prices for buyers.
Final Thoughts
Politics aside, the truth is that no single policy will solve the housing crisis. But increasing supply, removing artificial barriers, and making it easier for people to move is a step in the right direction.
The biggest challenge is overpromising. Building on federal land sounds great, but most of it isn’t where people actually want to live. Cutting energy mandates might lower costs, but it won’t fix affordability when mortgage rates have more than doubled.
What could work? A combination of ideas: smarter building near existing cities, portable mortgages, streamlined regulations, and better tax incentives for sellers. That’s how we start unlocking inventory and making housing more affordable.
In the meantime, don’t expect to see $300k homes in Utah. But if mortgage rates drop and the right policies are put in place, we could see home affordability improve—not just in price, but where it really matters - monthly payments.
If you have any real estate questions or are looking to buy or sell your home in Heber City, Midway, Park City, Utah or Salt Lake Counties, please reach out to me with any questions at (801) 885-2558 or by email at brandonrwood19@gmail.com.