How will Trump change the Housing Market? 2025 Predictions with Fabiano Altamura

This was a long conversation I recorded with my friend Fabiano Altamura, in the weeks before the November 2024 election. We talked about what could happen to the housing market depending on who won. I will keep it to what I said about housing, because that is what I know.

The most important thing I said is that the biggest problem with housing right now is not interest rates. It is inventory, or homes available for people to buy, especially for low to moderate income buyers. In California, a builder who wants to build a home faces permits and expenses that are so high they can barely make a profit. The risk for a developer to create a subdivision with a starting price around $300,000 or $400,000 just does not make sense. I said the added requirements for things like environmental review, septic systems and solar over the last decade can add about $100,000 to the price tag of building a home. That is why I believe that, whichever party is in office, the way to address affordability is to lower the cost to build, and more supply. I talked about deregulation as one route, and about the cost of materials like lumber and metal as another.

On rates, I explained that mortgage rates fell below 3% during the pandemic because the Fed stimulated the economy in a way it never had before. Freddie Mac's 30-year average hit a record low of 2.65% in January 2021. Before that, in the first Trump term, rates mostly ran around 4% to 4.5%. So I do not think rates under 3% are a baseline we should expect to see again. I also said that the president does not control the Fed directly, although he can put pressure on it.

We also talked about what the other side has proposed. I mentioned first-time buyer grants and bonds, lower rates, and parts of a bill that would let buyers purchase homes in bad condition and finance the renovation, and build accessory dwelling units to create income. I said those could be helpful. They do not solve the inventory problem on their own. I also said I am a fan of higher density housing because it adds rentals, income, jobs and construction.

The last thing I want you to take from the conversation is the part that has nothing to do with politics. People need to buy assets. It is really simple. Stop buying things that go down in value, get rid of debt, and buy things that go up in value. You and I cannot change who is going to be president. We can look at history and make better decisions for our family. I do not care who you vote for. I care about the quality of your life and your finances.

If you want to understand a purchase with renovation, or a first-time buyer program, I am glad to walk through it. Start with renovation loans, or get your rate. MortgageOne is now licensed in 49 states.