Donald Trump’s announcement of Scott Turner, a former Texas lawmaker and NFL player as secretary of the Department of Housing and Urban Development (HUD) designate in November 2024 provided signals of what the policy direction of the Department would be.
This is more so, because of the vast experience of the new secretary of the Department of Housing and Urban Development Designate.
Turner, led the White House Opportunity and Revitalization Council to improve federal economic development in distressed communities, during Trump’s first tenure, and has been the chief visionary officer at JPI since 2023. He also chairs the Center for Education Opportunity at the America First Policy Institute.
This report examines contemporary issues plaguing the sector as Trump returns to the White House in a few days.
Current Market Conditions
The U.S. housing market is experiencing historic lows in demand, with mortgage applications dropping to levels unseen since 1995. High mortgage rates, now around 7.26%, have made home buying less affordable, with potential buyers needing to allocate nearly 40% of their gross income to mortgage payments. This issue is compounded by high inflation and student loan debt burdens.
Impact of Rising Mortgage Rates
Mortgage rates have reached an 8-month high, marking one of the toughest periods for buyers since the 2006 housing bubble. Despite some Federal Reserve rate cuts, the anticipated surge in buyer demand has not materialized. Existing home sales are at multi-decade lows, though there’s a slight uptick in cash transactions, indicating activity from investors or individuals with significant savings.
Affordability Crisis
The affordability crisis remains a key issue, with the required income to purchase a home surpassing median incomes. This situation mirrors conditions seen in 1981 and 2006, prompting discussions on possible solutions such as increasing housing supply, adjusting tax policies, and considering radical measures like a federal housing guarantee and rent caps.
Legislative Developments in Rentals
There are legislative advancements on the rental front, with the Renters’ Rights Bill moving forward in England, aiming to eliminate no-fault evictions and introduce other tenant protections. However, concerns arise that such changes could reduce rental property availability, potentially driving up rents.
Regional Market Trends
States like Texas and Florida are exhibiting signs of market softening, hinting at potential price drops. Other regions, however, continue to face tight inventory and high demand. The National Association of Realtors has identified several “hot spots” for 2025, suggesting that in some areas, market dynamics might favour sellers due to stable or slightly decreasing mortgage rates and increasing inventory.
Future Market Outlook
While mortgage rates might stabilize around 7% in the short term, speculation exists that they could decrease to the low 6% range in the coming years, potentially encouraging refinancing and new purchases. The market’s recovery and stabilization will heavily depend on broader economic factors such as inflation control and policy changes.
