How A New Administration Could Impact Home Affordability – Forbes Advisor – Technologist

With the 2024 presidential election fast approaching, many pressing issues, including the future of housing affordability, hang in the balance.

Both former President Donald Trump and Vice President Kamala Harris have acknowledged America’s home affordability and supply issues. But how do their housing agendas differ, and which candidate might be more beneficial for first-time home buyers and others seeking affordable homeownership?

Though housing experts and stakeholders are still seeking clarity on each candidate’s housing policy, here’s what prospective buyers should know as we enter the final stretch of the election season.

What a New President Could Mean for First-Time Home Buyers

First-time buyers have been feeling the biggest squeeze in the past few years, with home prices skyrocketing to record highs amid a simultaneous surge in mortgage rates.

To support first-time buyers and other affordability-challenged home seekers, the Biden-Harris Administration has taken a multi-pronged approach to increase housing supply and affordability through various grants and loan programs.

However, how will Trump’s or Harris’s agenda build on or vary from these actions?

We spoke with Daryl Fairweather, chief economist at Redfin, who says: “Harris’s plan is to give $25,000 in down payment assistance to first-time home buyers, but it would obviously take Congress to pass something like that. But if she were successful, that would be, I think, the thing that home buyers feel the most.”

Fairweather suggests looking at Trump’s previous term for insights into his housing policy approach.

“We saw during his term that he didn’t really put a lot of resources into housing,” Fairweather says, adding that people should expect more free market approaches and less government intervention in the housing market if Trump is reelected.

What Can a President Do for First-Time Buyers in the First 100 Days?

Shamus Roller, executive director of the National Housing Law Project, tells Forbes Advisor that although Harris backs several initiatives aimed at helping first-time home buyers—such as a tax credit for builders constructing starter homes—most of these policies would require congressional approval.

Moreover, the political makeup of Congress will influence whether these proposals gain the support to move forward.

Still, Roller notes that a new president could take meaningful action within the first 100 days without congressional approval.

“[T]he Biden Administration has done quite a bit on the regulatory side through the administrative agencies,” Roller explains, pointing to agencies like the Federal Trade Commission’s efforts to regulate junk fees and their impact on rental housing and the Consumer Financial Protection Bureau’s work in addressing predatory lending and protecting home buyers.

Otherwise, Roller notes that if Harris is elected, her administration could build upon the current administration’s existing plans and initiatives and start new ones. On the other hand, if Trump wins, Roller anticipates his administration rolling back some of those efforts but hopefully putting forth his own housing policies.

Can the Next Administration Solve America’s Housing Shortage?

The country is experiencing a severe housing shortage, with the estimated housing deficit at 4.5 million homes in 2022, according to Zillow data. This shortage is a central factor impacting home affordability due to demand far outpacing the supply.

New home construction has filled the gap to a degree, but due to various impediments, building enough homes quickly and affordably remains challenging. Notably, builders often face local zoning laws and regulations that make constructing homes more difficult and expensive.

So what could a new administration do, if anything, to loosen local zoning policies?

“Harris has got this proposal for this $40 billion innovation fund that is not detailed,” Roller says. “But I think a real effort to create some incentives for local and state governments to reform zoning code and other barriers to housing production, I think that’s a really interesting idea.”

Trump has proposed opening more federal land to developers as a solution to the housing shortage, but Fairweather remains skeptical.

“The issue of housing is really about getting housing built close to jobs,” Fairweather says. “So, if the federal land is not near the job opportunities, then it’s not all that useful.”

Fairweather believes the resolution to the housing shortage problem lies in converting single-family zoning to multifamily zoning in cities.

“They (Trump and Vance) don’t have a plan to build enough homes to solve the shortage,” Fairweather says. “Harris does—and you can critique her plan—but Trump doesn’t have a plan.”

Comparing Harris’s and Trump’s Housing Policies

While a president’s power to implement policies is limited, and an array of complex factors play a role in home affordability, here’s a snapshot of the key housing initiatives each candidate proposes that could impact home buyers.

Buying Now vs. Waiting: How Much Should a New Administration Influence Your Decision When To Purchase a Home?

If you’re house hunting, should the upcoming election and the potential housing policies of a new administration influence your decision whether to buy now or wait until after the results are in?

“I think if you’re waiting for Harris’s policies to be implemented and make a meaningful difference, you might be waiting a long time,” Fairweather says, explaining that if Harris is elected and managed to pass a housing bill in her first year, it could still take two to three years to see any real impact.

Also, Fairweather points out that the way Harris structures and times her supply and subsidy policies would be key for maintaining affordability.

“[I]f the $25,000 down payment assistance comes into effect before the new construction is ready, then that could cause a run-up in prices and increased competition for the homes that are available for sale,” Fairweather says.

Why Some Would-Be Home Buyers Say They Are Waiting Until After the Election

Meanwhile, a Redfin election survey revealed that nearly a quarter of potential first-time buyers are waiting until after the election and will monitor the economy before committing to a home purchase.

Notably, despite uncertainty surrounding what policies the next president can successfully enact—and when—over 26% of survey respondents said they are holding off on the potential Harris housing affordability plan. Twenty-five percent of Trump voters said they are delaying home-buying to see what affordable housing issues he would address if re-elected.

However, Fairweather emphasizes that it’s challenging to plan around potential policy changes, advising buyers to purchase a home as soon as they can afford one that fits their needs, allowing them to gain a foothold in the housing market sooner rather than later.

In the meantime, Roller hopes whichever candidate wins will prioritize a comprehensive national housing plan, as the current housing policy is fragmented across various agencies and departments.

“There is no entity at the national level that is responsible for understanding the scope of the problem or having a response to it, and when that’s the case, it’s got to be the president’s office in a lot of ways that comes forward with a plan and really analyzes the problem.”