Home builders have big plans for the next few years – and they’re crediting Donald Trump.
After years of tumult in the housing market, builders across the country are betting that looser regulations and what they hope will be an economic boom will make it easier to build and sell. They’re also hoping those tailwinds more than offset possible hazards of Trump’s agenda, including ramped-up tariffs on Canada, Mexico and China that could push up costs for materials, and aggressive immigration policies that could mean the deportations of construction workers.
“The energy right now is just unbelievable,” said Greg Hardwick, president and owner of Hardwick General Contracting, a custom home builder in central Florida. “Among builders, among clients – anybody that is taking a risk in the housing market right now feels really good.”
Builder sentiment improved for the third straight month in November, according to a survey from the National Association of Home Builders (NAHB) released this month. There was a particular rise in sales expectations over the next six months, as uncertainty from the election fades away. Forecasts from Fannie Mae this month also show new-home sales rising 7.2 percent in 2025, and a further 4 percent in 2026.
That’s all set against broader expectations for continued job growth, wages and gross domestic product, all while inflation eases to normal levels. The stock market has largely embraced Trump’s win. And the Federal Reserve is expected to keep cutting interest rates into next year, benefiting businesses trying to get loans and prospective home buyers applying for mortgages. (Mortgage rates recently ticked up, since analysts think the strong economy will ultimately lead to fewer Fed rate cuts.)
Both Trump and Vice President Kamala Harris made housing issues central to their campaign agendas. Harris put particular focus on creating more affordable homes, with plans to help build 3 million. She also proposed tax credits for builders and $25,000 in down payment assistance for first-time buyers. But now Trump’s policies could go forward, such as slashing regulations and opening up federal lands for new development.
“Both of the candidates for president rightly identified housing supply as the key issue,” said Will Ruder, executive vice president of the Home Builders Association of Greater Kansas City. “Everyone made the right diagnosis. Now, what is the prescription or the treatment?”
Interviews with builders across the South, Midwest and West Coast highlighted two regulations the industry hopes Trump could pare back as he tries to cut red tape. One prohibits building homes near water, or roadside drainage ditches that connect to creeks and streams, without first obtaining a federal wetlands permit. Another has to do with energy efficiency requirements for certain government-backed properties that were made stricter under the Biden administration. Generally, builders say both rules add costs and delays.
In Birmingham, Alabama, Alicia Huey’s custom and spec homes can fetch $850,000 to $1.5 million. She rode the supply chain swings of the pandemic: At one point, lumber for a 3,200-square-foot home spiked from $35,000 to $125,000. Projects that typically took eight months stretched into a year.
But Huey said regulations that can seem arbitrary consistently add the most costs and wait times to her business, AGH Homes. Once, a client hired Huey to add a fence on to her property. But since the lot backed up to a drainage ditch, which fed into a creek, Huey would have had to get a special wetlands permit before putting posts in the ground, so the client abandoned the project, she said.
“She got a new dog, and her dog would have been long gone by the time we would have gotten the fence up, probably,” Huey said. “It was a little bit of overreach, I thought.”
Yet many economists and housing experts fear Trump’s tariffs will scramble the strong economy and make it harder to build. Trump has said he would impose new tariffs on all imports from China, Mexico and Canada as one of his first presidential acts. Tariffs of the scale Trump is proposing would affect more than $1.5 trillion in goods moving across North America, and about $600 billion between the United States and China.
In Dallas, Joshua Correa is taking a “wait and see” approach. The owner of Divino Homes builds 14 to 18 custom homes in the area per year. He’s encouraged by Trump’s promises for a lighter regulatory touch, and by the repeat president’s background in real estate. Correa also thinks lower interest rates would help the market, where his homes sell for around $850,000.
But Correa knows trade policy could also matter for his bottom line. It took years after the pandemic for wild price swings and supply chain issues to sort themselves out.
“We hope they find a fine line,” Correa said on tariffs. “We have to work with other countries. Other countries do sell cheaper materials, which helps us build affordable housing.”
Then there is immigration. Trump has made strict restrictions – including deporting millions of people, detention camps and an expanded border wall – core to his agenda. He also argues that immigrant workers reduce wages for everyone and take jobs from native-born Americans, and that forcing undocumented immigrants out of the country could lower housing costs by reducing demand.
But mass deportations would have tremendous impacts for construction, where about a quarter of the workforce is undocumented, according to economists’ estimates.
Calls have spiked over the past few weeks at Magleby Construction, a luxury custom home builder in Utah. Brad Simons, president of Magleby Sun Valley, said some wealthy clients had been holding back before Election Day. The expectation for a roaring stock market and lower taxes delivered a dose of confidence right after Trump’s victory.
Still, it’s hard for Simons to see how other parts of Trump’s platform lift home building. Magleby doesn’t employ undocumented immigrants. But they could still work on job sites through other contractors. Simons said he isn’t in favor of illegal immigration. But especially in construction and agriculture, he asked, “Who does the work?”
Mass deportations would have a “dramatic impact on cost, dramatic impact on schedules,” Simons said. “Even the fear of it – if people go into more hiding and don’t come in to work, we could see some problems.”
Michael Clemens, an economist at George Mason University and fellow at the Peterson Institute for International Economics, said the knock-on effects of mass deportations would ripple through the housing market. He pointed to a working paper from February that looked at Secure Communities, an Obama-era program of agreements between local police departments and federal immigration enforcement officials, that over several years resulted in the deportation of about half a million more workers than would have otherwise been removed from the country.
The program led to far fewer construction jobs, including for native-born workers, the paper found. Three years into the program, counties also saw 2,000 fewer homes built than they would have without the policy, and home prices rose 17 percent.
“With reduction in supply, the price goes up,” said Clemens, who also specializes in immigration. “Demand does not go down a ton.”
For now, builder Carl Harris is feeling bullish in Wichita, Kansas. His standard home – five-bed, three-bath – typically sells for $450,000. Harris expects more people will be shopping around as mortgage rates cool off. And he’ll be ready.
“I’ve got requests in to do some more specs. I’m buying lots. I’m feeling good,” said Harris, who is also the chairman of NAHB. “I’m feeling as good as I’ve felt for a few years.”
(c) Washington Post
