Trapped renters want home prices to fall so they can finally get onto the property ladder. Millions of existing owners want values to stay high. These and other conflicting interests make it hard for policymakers to give young Americans a leg up in a brutal housing market.
President Trump is heeding anger about housing affordability ahead of the midterm elections, and the administration has been drip-feeding ideas about how to tackle the issue.
[Trump proposed] Policies that give home hunters extra buying power, such as a 50-year mortgage and lower rates, do nothing to address the underlying housing shortage and could even push prices higher.
The reality of what would be needed to make homes affordable again is stark, and shows why there is no simple fix for housing markets.
**If home prices and mortgage rates remain stuck where they are today, a 56% increase in the median household income to $132,000 is needed to return affordability to where it was six years ago.** Wages are rising faster than home values, but it would still take around a decade to inflate incomes to this level.
Yet policymakers will be hesitant to address the housing crisis with measures that harm values, such as subsidizing a gush of new supply. **For 88 million U.S. households that already own their property, the housing market is a major success story.** As of the third quarter of 2025, they were sitting on a near-record $34.4 trillion of housing equity, an increase of nearly 90% since right before the pandemic, the latest data from the Federal Reserve show.
Another reason the government can’t pour cold water on home prices is the potential consequences for the wider economy. The wealth effect that has been propping up consumer spending is primarily driven by the stock-market boom, but high home prices are likely helping too.
It is hard to come up with a national policy to boost housing supply, anyway: Land-use restrictions and zoning laws are set by more than 33,000 different local entities across the country. Things are beginning to move in places where the housing supply is especially crunched. Last week, New York state loosened environmental rules to try to speed up housing construction.
For now, White House proposals are about grabbing headlines that may play well with voters. These won’t change the fact that housing remains a zero-sum game.
Posted by assasstits
2 Comments
Submission statement: The Trump administration is proposing a set of policies to tackle the high costs of housing that has made buying a home unaffordable for young people. These policies don’t tackle the root issue of lack of supply and are unlikely to work. Leadership nationwide is reluctant to increase supply because homeowners have made record levels of wealth from rising home values since the pandemic and this along with a booming stock market is propping up the economy.
Have you tried subsidizing demand?