Trump’s Speech to Congress Highlights His Economic Agenda but Overlooks Housing Affordability Crisis

President Donald Trump addressed a joint session of Congress on Tuesday night.

📌 Read the full article here: Trump’s Speech to Congress Highlights His Economic Agenda but Fails To Address Housing Affordability Crisis

A Focus on Economic Policy, Not Housing Solutions

In a two-hour address, Trump emphasized tax cuts, deregulation, protectionist trade policies, and domestic investment as key pillars of his economic agenda. While he briefly mentioned mortgage rates—stating that federal spending cuts led by Elon Musk’s Department of Government Efficiency would help lower borrowing costs—he did not provide any direct solutions to improve affordability for homebuyers.

Though mortgage rates have declined slightly since Trump took office—dropping from 6.96% to 6.76% per Freddie Mac—these modest changes have done little to offset the housing market’s affordability crisis. Realtor.com® senior economist Joel Berner pointed out that Trump's remarks lacked discussion on the inventory shortage or rising home prices, both critical factors impacting buyers today.

Rising Tariffs Could Further Strain the Housing Market

While housing affordability was left out of the speech, Trump did announce aggressive tariff increases, including a new 25% tariff on goods from Canada and Mexico. This move directly impacts key construction materials like copper, steel, and lumber—raising concerns that these costs will ultimately be passed on to homebuyers.

Homebuilders fear that higher tariffs on imported materials, particularly lumber from Canada, could increase new home prices. How much? A standard 3-bedroom, 2-bath, 2-car garage home could see an increase in cost of $15,000–$25,000 due to these tariffs alone. That added expense makes it even harder for buyers to afford newly built homes.

The Affordability Crisis Is About More Than Just Interest Rates

For years, the average age of a first-time homebuyer was 28. Today? That number has jumped to 38 years old. Why? It’s not just interest rates—it’s inventory.

The 2008 housing crisis didn’t just cause home values to plummet—it destroyed builder confidence. Many builders stopped constructing homes altogether because demand disappeared, and they lost trust in the market’s ability to recover. Fast forward to today, and the consequences of that slowdown are still felt:

✅ The U.S. is currently short by 3.2 million housing units, according to Freddie Mac.
✅ Builders want to build but are hesitant due to uncertain buyer demand.
✅ Higher interest rates make it more expensive for builders to take out loans for new developments.

Even though builders are offering incentives—such as rate buy-downs when buyers use their preferred lenders—they are also cutting profit margins to stay competitive. Despite this, many first-time homebuyers are still sitting on the sidelines, choosing to live with family instead of entering the market.

Rates play a role in affordability, but they are NOT the whole picture. Until builder confidence rises and more homes are constructed, the affordability crisis will persist. Builders need to see consistent buyer activity before they ramp up production, and right now, many are hesitant.

Bottom Line: Inventory Is the Real Issue

The housing crisis started with the builder pullback in 2008, but it doesn’t end there. Until supply catches up with demand, affordability will remain a challenge—even if/when mortgage rates drop.

If you’re thinking about buying or selling, now is the time to have a plan. Whether you're looking at new construction, resale homes, or just trying to understand your options, I can help guide you through the process. Let’s chat about what works best for your goals.

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