Donald Trump backs rising home values despite affordability concerns (Picture credit: AP)

US President Donald Trump has made it clear that he wants home prices to keep rising, pushing back against calls to increase construction to make housing more affordable. Speaking at a Cabinet meeting on January 29, Trump said he did not want policies that would bring prices down, arguing instead that homeowners should continue to benefit from rising property values, as per news agency AP.“I don’t want to drive housing prices down. I want to drive housing prices up for people that own their homes,” Trump said, adding that making houses “too easy and too cheap” to buy would reduce their value.

Political calculation ahead of midterm elections

Trump’s stance could strengthen his support among older voters, who are more likely to own homes and turn out in large numbers during midterm elections in November. AP VoteCast data shows that 81% of Trump’s voters in the 2024 election were homeowners, many with low-rate mortgages or homes already paid off. However, analysts warn that the strategy could alienate younger voters, who played a key role in expanding Trump’s coalition in 2024. Brent Buchanan of Republican-aligned polling firm Cygnal said voters under 40 were crucial to Trump’s return to the White House and could stay away if they feel policy is tilted towards baby boomers.

Younger voters feel squeezed out

Housing affordability remains a major concern, particularly for younger Americans. Booker Lightman, a 30-year-old software engineer in Colorado, told AP that limited construction was pushing people out of the state. “There’s just not enough housing supply,” he said, as quoted by AP.Real estate agent Shay Hata said competition for homes had become intense, with many suburban properties attracting five to 20 offers. She described the market as “very discouraging for buyers” who are being priced out.

Construction slows despite housing shortage

Despite the supply crunch, new construction has slowed. According to the US Census Bureau, permits for single-family homes fell 9.4% over the past year to October, dropping to an annual rate of 876,000, reported AP. Economists and industry experts argue that boosting supply is key to easing affordability pressures.

Mixed signals on housing policy

Trump previously supported measures to expand housing supply, including tax breaks, deregulation and opening federal land for development. As recently as October, he urged builders to ramp up construction, calling on Fannie Mae and Freddie Mac to help homebuilders “restore the American Dream.”In office, however, Trump has focused mainly on pressing the Federal Reserve to cut interest rates and directing the two government-backed mortgage firms to buy at least $200 billion in home loan securities to lower borrowing costs.

Risks ahead for prices and voters

Experts caution that if economic growth lifts demand further, home prices could rise even faster. Edward Pinto of the American Enterprise Institute said construction would need to increase by 50% to 100% over three years just to stabilise prices. “It’s very hard to crater home prices,” he said, suggesting Trump’s fears of falling values may be overstated.