The United States has been dealing with an affordable housing crisis for far too long now, and those who have done their homework know the bureaucracy that took place over the past four years played a big part in taking down the housing market.
Fast forward to 2025, we’re we have a different Administration in place, and like everything else the new presidential team has tackled so far, no time was wasted addressing the housing issue. On day one, an executive order titled Delivering Emergency Price Relief for American Families and Defeating the Cost-of-Living Crisis was signed, which touched on lowering the cost of housing and boosting inventory.
The Trump Administration won’t be able to correct the market as quickly as everyone would hope for. Still, they do have the ability to pressure certain sectors and individuals to get the ball rolling and move the needle in the right direction.
Many individuals feel this is a step in the right direction, giving industry professionals, homebuyers, and sellers a bit of hope. One such person, Chief Advocacy Officer Shannon McGahn of The National Association of REALTORS (NAR), issued a statement in response to the executive order:
“The President’s executive order underscores the critical need for bold, coordinated action to lower housing costs and increase the availability of homes for families across this country. NAR has long advocated for policies encouraging housing development, improving affordability, and supporting sustainable homeownership opportunities. We look forward to working with the Administration in the next steps and putting this executive order into motion.”
Related Article: American Dream CRUSHED – SCE Housing Survey Reports Renters’ Hopes of Owning a Home Sinks to Historic Low
Addressing the Longstanding Housing Crisis
Although vague, the executive order makes it clear that the Administration has the housing crisis on its radar. Joel Berner, Senior Economist of Realtor.com, makes note of this as he states, “This order is light on details for how to address the housing affordability crisis, but we find it encouraging that housing is remaining toward the top of the agenda and that executive branch leaders will be reporting on their progress toward housing affordability goals.”
The official order reads, in part:
“I hereby order the heads of all executive departments and agencies to deliver emergency price relief, consistent with applicable law, to the American people and increase the prosperity of the American worker. This shall include pursuing appropriate actions to: lower the cost of housing and expand housing supply; eliminate unnecessary administrative expenses and rent-seeking practices that increase healthcare costs; eliminate counterproductive requirements that raise the costs of home appliances…”
It’s obvious to many why the housing sector was included in the group of “day one” executive orders. It’s been in shambles for years now. As a testament to how serious the housing market problem has been, Freddie Mac released an outlook report that stated that as of Q3 2024, they estimated the national housing shortage to be 3.7 million units. Other sources, such as Realtor.com, reported the number could actually be in the seven million range.
High Mortgage Rates and Rising Home Prices
Along with a limited supply, there’s the unaffordability factor, which includes high mortgage rates that make monthly payments unmanageable, as well as home prices that have continued to skyrocket over the past four years, and these factors have pushed families into rentals.
It’s really an expensive mess for those seeking out a place to call home in the United States. Rents have risen so much that it’s been estimated that Americans are spending more than 30% of their income on rent. Even with rental rates as high as they are, at this point, renting offers a much easier entry point than purchasing a home.
Related Article: Report States Renting More Affordable Than Buying Indicating Financial Security for Investors
Regulatory Requirements Keep Housing Expensive and in Short Supply
The Administration tackling housing affordability and shortages sounds good and well, but as Professor of Economics and Finance at City University of New York/Queens College, Dennis Shirshikov puts it, “Long-term effectiveness will depend entirely on the Administration’s ability to translate executive orders into actionable policies that incentivize state and local governments to reform zoning laws and reduce barriers to construction.”
This brings us to some of the red tape bureaucracy that’s feeding into the current housing crises that Americans are dealing with and the Administration has addressed. The presidential executive order states: “Many Americans are unable to purchase homes due to historically high prices, in part due to regulatory requirements that alone account for 25 percent of the cost of constructing a new home according to recent analysis.”
To further elaborate on this, Danielle Hale of Realtor.com comments on how overall regulatory requirements have interfered with the nation’s ability to ramp up the housing supply.
“About $90,000 of the cost of new construction is due to regulation and regulatory compliance. With new construction just over $400,000, that’s a pretty hefty percentage. Maybe we can take a review of these regulations and find areas where maybe we can cut back on some of the rules or fees associated with those regulations to improve the outcome and enable builders to not just build more housing, but build it more quickly and more cost-effectively,” says Hale.
Related Article: Home Affordability Crisis – Lowest Level in Nearly Two Decades Drives Up Demand for Rentals
Climate-Related Regulations Placed Over the Housing Needs of the People
The policies of the Biden Administration hindered housing affordability at a time when they should have instead been focused on helping the American people financially. For example, a rule was set in place that honored Earth Week and, in turn, reached into the pockets of U.S. citizens.
Sen. Marco Rubio explains it well when he discussed how HUD and the U.S. Dept. of Agriculture released their energy-efficiency standards that must be put in place when building single and multi-family homes. “That HUD enacted this rule to celebrate ‘Earth Week’ last month reveals the reason for this absurdity: Once again, the Biden Administration is putting environmentalist lip service over real human beings.”
He went on to explain how this environmental plan could raise the cost of a home by $31,000 each, and that in reality, it would take a homeowner around 90 years to break even on the energy savings.
On top of this, the Department of Energy and Environmental Protection Agency, under Biden, enacted regulations on most home appliances such as washing machines, dishwashers, and the like. This pushed the cost of these standard home appliances up at a time when people are having difficulties just putting food on the table.
Related Article: A Ticking Time Bomb – National Debt Growing by $1 Trillion Every 100 Days
Regulations, Runaway Inflation & Government Giveaways
Couple all this with the record high inflation that spiraled out of control during the past Administration, complete with the endless printing of money, government giveaways to non-citizens, billions of dollars sent to foreign countries to fund wars, a national debt that’s out of control, and you’re left with unaffordable housing, among other things.
Is There a Solution on the Horizon for the Housing Crisis?
The Trump Administration is attempting to cut through the nonsense by reeling in government spending and addressing the housing crises. What will become of it all? Only time will tell. However, with the rapid, focused pace the new Administration is taking, hopefully, the American people will see results in the near future. In the meantime, the U.S. is still struggling with limited housing inventory and unaffordable entry prices for those who do find a home for sale.
With all that said, savvy investors are positioned to buy while demand for renting is through the roof. If you’d like to look into placing a cash flowing property into your portfolio, contact Morris Invest, or visit our program overview page. Our team can take care of all the details for you to make it a simple process; we even place a tenant and property manager so you won’t have to. Additionally, our rental properties are brand new, located in areas with booming economies and high rental demand, and typically have a lucrative internal rate of return of 18%+.
In the meantime, dive into the following video that discusses the housing crisis in detail:
