A flurry of executive orders issued this week could have big implications for the housing market
The new Trump administration has wasted no time in putting its stamp on Washington, with the president inking a slew of executive orders this week in a policymaking blitz.
Among those directives was an order to introduce “emergency price relief” on housing costs and other expenses, which highlighted the inability of many Americans to purchase a home because of skyrocketing property prices.
That order offered little clarity on how President Trump intends to make housing more affordable but said regulatory requirements make up 25% of the cost of constructing a new home, apparently referring to a recent National Association of Home Builders (NAHB) report that made the same claim.
The NAHB and 15 state attorneys general filed a complaint earlier this month in a bid to stop the adoption of new energy efficiency standards for multifamily and some single-family housing programs by the Department of Housing and Urban Development (HUD) and Department of Agriculture – and those regulations could be on the way out as a result of Trump’s executive order, according to mortgage lawyer Peter Idziak (pictured top) of Polunsky Beitel Green.
“My read is that although it’s not specifically directed in the executive order, that’s going to be a major item on the chopping block – rolling back, revising, or even eliminating some of those energy efficiency standards,” he told Mortgage Professional America.
“We’ve seen executive orders in other spaces, like with light bulbs and appliances, that the Trump administration is looking to roll back those energy efficiency standards. So that’s my educated guess.”
Trump’s second presidency could bring major changes to housing & mortgages, including the end of conservatorship for Fannie Mae & Freddie Mac. UWM’s Mat Ishbia sees positive changes ahead, focusing on innovation and consumer access.https://t.co/VEAIIuAQdO
— Mortgage Professional America Magazine (@MPAMagazineUS) January 21, 2025
While Trump has named Bill Pulte as his nominee for Federal Housing Finance Agency (FHFA) director and tapped Scott Turner to lead HUD, the new administration has released few specifics about its plans on the housing and mortgage fronts, with the latest executive order a “broad-based” release, Idziak said.
“It’s unclear exactly what these ‘appropriate actions’ to lower the cost of housing will be,” he said. “But I think what gives the housing and mortgage industries hope is that… there was a focus on home affordability, which is good, and it is going to be a focus of the Trump administration going forward [although] it’s an open question of what specific actions are going to be taken.”
Could Trump’s executive orders hit a roadblock?
Other executive orders issued this week by Trump could have a spillover effect on the housing outlook, not least a clampdown on immigration and ramping up border security.
A large percentage of construction workers in the residential and multi-family spaces are likely undocumented workers, Idziak said – “and if you reduce that labor supply, you should see an increase in the cost of labor to builders.
“So you might see from some of these other executive orders, policies that actually serve to increase input costs… and maybe counteract some of the savings that you might get in other executive orders.”
The administration’s plans to strip back energy efficiency regulations, meanwhile, could be hindered by the fact that many of those are administered at a state and local level, rather than federal – although Idziak said it was positive that all levers of government seemed to be on the same page in terms of recognizing the housing supply problem.
“But then, when you get into the nuts and bolts of it – where do you build that housing supply? What kind of density can you have?” he said. “That’s where you get a lot of the local opposition.”
Trump says he’ll ‘demand’ lower interest rates
Trump signaled on Thursday that he could put pressure on the Federal Reserve to cut interest rates, telling an assembly of world leaders at the World Economic Forum in Davos that rates were too high and he would “demand” they fall immediately.
That could put him on a collision course with Fed policymakers, who are widely expected to opt against a rate cut in next week’s decision (January 28-29) and hold rates where they are. Markets currently believe the Fed’s first – and possibly only – reduction of the year will arrive in June at the earliest.
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