Trump’s Economic Vision: What Our Next President Means for the U.S. Housing Market
As the nation prepares for the incoming Trump Administration, the housing market is abuzz with anticipation. President-Elect Trump's economic vision, characterized by deregulation, tax cuts, and a focus on stimulating growth, promises to bring significant changes to the housing sector. With these policies aimed at boosting consumer confidence and increasing the supply of new homes, potential homebuyers and builders alike look forward to a more dynamic and accessible market.
“Trump’s election and the recent Federal Reserve rate cuts will likely transform the housing landscape and offer new opportunities and optimism for those looking to invest in their dream homes,” says Jeff Bunch, Partner at Keel Custom Homes. “This is an exciting time for the home construction industry, which has seen the impacts of high interest rates and inflationary spikes in construction costs.”
The Current State of the New Home Construction Market
As of late 2024, the new home construction market has been experiencing a period of adjustment. High mortgage rates have reshaped the housing market, with existing homes making up a larger percentage of for-sale inventory. In the third quarter of 2024, newly built single-family homes accounted for just 28% of homes for sale, marking the lowest market share for new homes in three years. This decline can be attributed to a shift in homeowner attitudes about selling their homes and the easing of the "lock-in effect" that kept homeowners with historically low-rate mortgages from selling.
Key Factors Shaping the Housing Market Under Trump
Several key factors are likely to influence the new home construction market under the Trump Administration:
1. Deregulation to Reduce Housing Costs
One of the central themes of Trump's housing policy is deregulation. During his campaign, Trump emphasized reducing regulatory barriers to affordable housing. He proposed slashing regulations and permit requirements, which can add to housing costs for homebuyers. By reducing the regulatory burden on home construction, the administration aims to lower consumer costs and increase the supply of new homes.
2. Federal Land for Housing Construction
Trump has also proposed opening tracks of federal land for housing construction to address the housing shortage. While the impact in Central Virginia is not yet determined, this move could potentially increase the availability of land for new home developments, thereby boosting the supply of new homes in the market.
3. Immigration Policies and Labor Costs
Trump's stance on immigration could have less favorable implications for the housing market. The construction industry relies heavily on immigrant labor, and any policies that restrict immigration could lead to higher building costs. It’s too early to tell what, if any, impact this will have locally on the affordability and availability of new homes.
4. Increased Energy Supply
Trump's energy policy aims to boost traditional fossil fuel industries, such as oil and gas, by increasing production and reducing regulatory barriers, which can lead to lower energy prices. Lower energy costs can reduce the cost of production and transportation for a wide range of goods, including construction materials, ultimately leading to lower prices for consumers, including new homes.
Why 2025 Is the Perfect Time to Build a Custom Home
Given the current market conditions and the proposed policies of the Trump Administration, there are several reasons why now might be the ideal time to build your dream home with Keel Custom Homes:
Lower Interest Rates: The Federal Reserve Bank cut the interest rate by 0.50 percent in September and another 0.25 percent in November. More rate cuts are expected into next year. This is a positive development for potential homebuyers. Lower interest rates can make mortgages more affordable, allowing buyers to invest in their dream home without stretching their budgets.
Increased Housing Supply: With deregulation and the opening of federal land for housing construction, the supply of new home developments and building sites will likely increase. This could help address the current housing shortage and provide more options for homebuyers.
Custom Home Advantages: Building a custom home with Keel Custom Homes means you get to design a living space that perfectly suits your needs and preferences. From choosing the layout and finishes to incorporating energy-efficient features, a custom home offers unparalleled flexibility and personalization.
Economic Optimism: The Trump administration's broader economic policies, including tax cuts and deregulation, could stimulate economic growth and increase consumer confidence. This could lead to higher demand for new homes as more people feel financially secure enough to invest in homeownership.
Conclusion: A Promising Future for Homebuyers
Greater Richmond’s new home construction market is poised for significant changes under the Trump Administration. With a focus on deregulation, opening federal land for housing construction, and broader economic policies, the administration aims to address the housing shortage and increase the supply of new homes.
“For potential custom home buyers, the recent rate reduction by the Federal Reserve Bank and the proposed policies of the Trump Administration create ideal conditions for moving forward with a new custom home purchase,” says Bunch. “Now is the perfect time to take the leap and invest in a custom home that reflects your unique vision and lifestyle.”
Keel Custom Homes is ready to help you build the home of your dreams, tailored to your exact needs and preferences. Contact us today.