Will Trump’s Housing Plan Spark a Housing Boom or Bust in 2025?

The recently announced Trump housing plan isn't just another policy – it's shaping up to be a potential revolution in how we buy, sell, and build homes in America.

When Trump signed what might be the most aggressive housing relief package we've seen in decades, promising "emergency price relief for American families," it caught my attention. We're talking about the possibility of $50k price cuts across the board for homebuyers. 

Let's dig deep into what this really means for you before you get too excited (or worried).

What is Trump’s Housing Plan?

The Trump housing revolution is more complex than just price cuts. After studying the executive order closely, I've identified three major moves that could reshape our entire housing landscape:

1. Slashing Prices/ Cutting Regulations

First, let's talk about those home prices dropping. Trump claims that government red tape alone forces you to pay an extra $100,000 on a $400,000 home. That's 25% of your home's cost potentially going straight to bureaucracy! 

The plan aims to slash these costs by reducing rules on developers and builders. If you're in the development business, you might want to check out Mailmix. – I've found it incredibly helpful for keeping track of projects and staying in touch with contractors during these changing times.

2. Tackling the Housing Shortage 

Second, there's a massive push to expand housing supply. The order prioritizes fast-tracking projects that have been stuck in bureaucratic limbo. This could mean more homes hitting the market faster, but here's where it gets interesting – and potentially concerning. 

The new Department of Government Efficiency (DOGE), headed by none other than Elon Musk, will be overseeing some of these changes. 

The Elon Musk housing policy approach might bring Silicon Valley efficiency to housing regulation, but it's also raising eyebrows among industry veterans.

3. Job Creation

Third, there's a strong focus on job creation in construction. This could be a win for workers who've been sidelined, but it also raises questions about labor availability and training.

What This Means for the Housing Market in 2025

If you’re wondering how all of this will impact the housing market 2025, here’s the good, the bad, and the unpredictable:

Policy Changes That Matter

The real estate market changes we're looking at aren't just surface-level tweaks. Trump's initiatives include eliminating certain climate policies that he claims drive up costs. 

Think fewer restrictions on energy usage for construction projects. While this might sound great for builders' bottom lines, it's stirring up debate about long-term environmental impacts.

Let's talk about the major reshuffling happening in federal housing agencies. Scott Turner, known for his work with opportunity zones, is the new pick for HUD secretary. Then there's Bill P, the new FHFA director, whose family name is synonymous with home building. 

Could his insider perspective be a turning point for Fannie Mae and Freddie Mac?

Speaking of changes, Elon Musk himself has called for deleting the Consumer Financial Protection Bureau (CFPB). That's a bold move that could significantly impact mortgage oversight and consumer protection.

Market Impact and Trade Considerations

Here's something crucial about the housing market news: we're facing a massive housing deficit 2025 that's been building since the 2008 crash. Even with these new policies making it easier and cheaper to build, we're looking at years, possibly decades, of catching up. 

The math is pretty simple – we've been underbuilding by roughly 2 million homes per year compared to population growth and household formation.

And speaking of building, let's talk about those tariffs on Canadian lumber. Trump has hinted at reintroducing steep tariffs on Canada and Mexico. Remember what happened during his first term? Lumber prices shot up, adding nearly $9,000 to the cost of building a home. 

During the Biden Administration, the average American household got hit with nearly $50,000 in regulatory costs, while during Trump's first term, he managed to cut costs by $1,000 per household.

How Trump’s Plan Could Affect Homebuyers

Here's my take on the affordable housing plan: while Trump's regulatory cuts might initially push prices down in over-regulated markets, that relief could be incredibly short-lived. Why? 

There's massive pent-up demand from buyers who've been priced out of the market. As soon as prices show any sign of dropping, we could see a flood of buyers jumping in.

Let me share some crucial home buying tips based on these changes:

Consider looking for deals in municipalities with the highest regulatory red tape right now. Places like:

• San Francisco, where building permits can take years and add hundreds of thousands to development costs.

• Seattle, where zoning restrictions severely limit new construction.

• Boston, where the approval process can add 18 months to any project

• Or parts of New Jersey, where environmental regulations and local ordinances can make up to 35% of a home's cost. 

• Even some surprising markets like Boulder, Colorado, and Austin, Texas, have regulatory costs that can add 20 to 30% to home prices.

If you're currently building, you need to act fast. Those potential 25% tariffs on Canadian lumber could hit as soon as February 1st. Talk to your builder immediately about locking in material prices. 

You can actually pre-purchase critical materials through your builder to protect yourself from future price increases.

Long-Term Outlook and Investment Strategy

Let's talk housing market predictions. Even with Trump's new policies making it easier and cheaper to build, we're looking at a 5-10 year catch-up period, even if construction immediately doubled (which is unlikely given labor and supply constraints).

Want a real estate investing tip? Here's my biggest piece of advice: 

don't sell unless you absolutely have to. 

With the current supply deficit, rental demand is likely to remain strong for years to come. If you must move, consider keeping your current property as a rental. This way, you'll maintain a foot in the real estate market, which could be crucial given the strong long-term appreciation potential.

The Best Investors Don’t Wait for the Perfect Market

Trump’s housing plan is ambitious, no doubt about it, but like any bold initiative, it comes with both risks and opportunities. Will this massive transformation lead to a housing market crash? I don't think so. 

Instead, we're likely looking at a significant reshaping of how homes are built, bought, and sold in America.  With the right strategy, you could position yourself to benefit from these historic changes in the housing market.

And if you’re serious about real estate, why not talk strategy over a round of golf? Golfing with me gives you the chance to pick my brain about investing, marketing, and how to position yourself in this shifting market.