Her focus on protecting consumers is reflected in Oxford Economics analysts’ projections that $143 billion will be invested in affordable housing by 2033 if Democrats win the White House and both branches of Congress. But some housing experts believe the party’s focus on consumers is problematic. Ultimately, they believe Democrats are creating more demand for an industry already struggling to keep up with supply.
“We will make more precise efforts to ensure that as a country we are building more affordable housing,” Federal Hall Policy Advisor who serves as acting commissioner federal housing administration (Federal Housing Administration) under the Trump administration. “But what’s amazing to me about the Biden administration is that they’ve always diagnosed the problem correctly. They admit it’s a supply problem, but every one of their solutions is a new demand-side subsidy.
For example, during his State of the Union address in March 2024, Biden called for a one-year tax credit of up to $10,000 for middle-class families selling new homes, aimed at helping address the shortage of homes for sale. But analysts believe these sellers are likely to become buyers again and will continue to put pressure on the market. They also said the credit was unlikely to be approved by current members of Congress.
Biden also announced an annual tax credit of $5,000 for two years for middle-class first-time homebuyers. Harris, meanwhile, mentioned banning “hidden fees and unexpected late fees that banks and other companies use to cover their profits,” while pushing to “take on corporate landlords and limit unfair rent increases.”
Some experts believe the federal government will naturally focus on the demand side of the industry because there is little it can do on the supply side. For example, zoning laws are a requirement for building new housing and are also a local administrative issue. But other experts say there are creative ways to increase supply, such as making federal land available and incentivizing builders.
To achieve their goals, Democrats are more likely to expand the housing ecosystem to include federal housing finance agency (Federal Housing Finance Agency), federal housing administration (Federal Housing Administration), Fannie Mae, Freddie Mac and Ginnie Mae. That means moving forward with programs that cut premiums, lower fees and offer new loan products, such as Freddie Mac’s closed-end second mortgages.
Meanwhile, the CFPB raised questions about its funding mechanism, which was rejected by the board in May. United States Supreme Court — will continue to fight against “garbage fees”, a controversial topic in the industry, under the leadership of Rohit Chopra. It would also advance the agenda of eliminating medical debt from credit reports and reducing the cost of credit reporting for the mortgage industry.
But regardless of who occupies the Oval Office in 2025 and beyond, the CFPB and other agencies are now under greater scrutiny. In June, the Supreme Court overturned a 1984 Chevron decision, meaning courts can rely on its interpretation of ambiguous laws while curtailing the power of federal agencies to interpret the laws they enforce.
“What we see from director Chopra is that he has a broader vision [of the CFPB]. He thinks the CFPB can play a bigger role [gaps in the regulatory space]”, says Jason Cave, Piedmont Risk Advisors, LLC Served in executive positions in the company Federal Deposit Insurance Corporation (FDIC) and FHFA.
Cave said the Democratic administration will continue to focus on equitable and sustainable housing and “really push to lower the cost of loan origination.” In another four years, they can make meaningful changes through things like the cost of credit reporting.
if the republicans win
Oxford Economics predicts that if Donald Trump returns to the White House, the core personal consumption expenditures price index, the Fed’s preferred inflation measure, could rise by 0.3 to 0.6 percentage points in late 2027 and early 2028. Slow down or pause interest rate cuts.
Critical to this outcome is what happens to several provisions of the 2017 Tax Cuts and Jobs Act that are scheduled to expire at the end of 2025 unless Congress takes action.
Mark Calabria, former FHFA director under Trump, said the financial incentives for businesses are quasi-permanent. Still, individual provisions are set to expire, and the Trump administration may make some “adjustments and extensions.” On the financial front, Calabria added that the Trump team is discussing ways to stimulate the housing market.
“On the tax side, one of the things Republicans are considering is some kind of indexation, maybe temporarily, of the capital gains deduction on homeownership. It hasn’t changed since 1997. It’s a lot less now,” Calabre Ya said.
“Both governments will consider tax incentives to reduce the lock-in effect on existing home sellers,” he added. “You can debate whether one is more effective than the other. The Biden side seems to be more driven by tax credits. My take on the Republican Party? It’s probably more focused on capital gains.
Industry experts believe Republicans aim to strengthen community banks, make construction financing more accessible, invest in apprenticeship programs for professions like plumbers and carpenters and free up some federal land for housing. Given his experience in real estate, some say Trump will focus on regulatory levers to make it easier for developers to build by cutting red tape.
Regarding Trump’s plan, Heritage FoundationProject 2025 has been marked as a “wish list”. But Trump and his aides publicly criticized the proposals, and the group’s director, Paul Dans, resigned in late July.
In housing, conservative roadmap includes ‘reset’ U.S. Department of Housing and Urban Development (HUD), recommends “abolition” of the CFPB and supports an increase in FHA’s mortgage insurance premiums. Wolfson, who served at the Federal Housing Administration under Trump, said Republicans support a limited role for the FHA that “does not intrude on private capital,” so they may waive any rules that further cut premiums and may Consider taking steps to narrow your credit pool.
There is no consensus on removing the GSEs from federal regulation. Some experts believe there was no financial or political motive. Others say a Republican administration would raise companies’ capital ratios and reduce their market share — eliminating programs like the Freddie Mac second mortgage pilot — to attract private investors.
“In the Trump administration, whoever ends up serving as FHFA director and Treasury secretary, you will see a renewed exploration of exiting regulation and recapitalizing the GSEs to return them to their pre-2008 status as fully public companies. The agency is responsible for legislation and Bill Killmer, senior vice president of political affairs, said: Mortgage Bankers Association (Master of Business Administration).
According to Kilmer, a GSE release is “tricky,” could take longer than four years and would have an impact on capital markets. For example, Cave said: “The Fed is allowing banks to buy GSE mortgage-backed notes without being subject to counterparty credit limits because the GSEs are in conservatorship; you have to deal with the Fed on that because once they come out of conservatorship , big banks will far exceed concentration limits on government-backed corporate debt.
In considering the watchdog agency CFPB, the Trump administration will reduce “enforcement oversight,” which is how some observers define Chopra’s style. But it’s worth noting that Trump appointee Kathy Kraninger took about 70 enforcement actions from December 2018 to January 2021, and Chopra since October 2021 Approximately 60 enforcement actions were taken.
“They’re obviously taking a lot of steps now in terms of regulatory proposals and I would say the best thing for the market – and therefore for consumers who are looking for a fair, competitive, transparent market – is consistency. sex, stability, and long-term thinking. So fundamentally, swinging back and forth is bad for consumers. Florida Bankers Association.
Regarding so-called “junk fees,” Kraninger said, “When you have a product that people understand and use, I wouldn’t call it a junk fee.” On the subject of removing medical debt from credit reports, she said The U.S.’s “credit system is unparalleled globally, but we are denigrating that,” she said. She believes there are issues that need to be addressed, particularly around the equitable dynamics of medical debt, but they are subtle.
Despite their differing approaches to the housing and mortgage markets, Impact Capitol does not believe a second Trump administration will reverse all of Biden’s measures against minorities. He said that’s because the Republican Party has become more populist and has done a good job of appealing to low- and middle-income families as well as minorities and immigrants. At the same time, they no longer value large companies as highly as they once did.
