Personal Finance

What Trump’s presidency could mean for the housing market in the U.S.

Published

4 months ago

November 11, 2024

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President-elect Donald Trump wants to address housing affordability in the U.S. by fomenting the construction of new homes.

“We’re going to open up tracks of federal land for housing construction,” Trump said during an Aug. 15 news conference. “We desperately need housing for people who can’t afford what’s going on now.”

As of mid-2023, there has been a housing shortage of 4 million homes in the U.S., according to the National Association of Realtors.

“It’s clear that the prescription for that crisis is more building,” said Jim Tobin, president and CEO of the National Association of Home Builders.

There has been a small increase in new homes being built this year, but it’s still not enough to meet the high demand for housing, leaving a significant gap in the market where there are not enough homes available for buyers, experts say.

Single-family housing starts in the U.S., a measure of new homes that began construction, grew to 1,027,000 in September, according to U.S. Census data. That is a 2.7% jump from August.

While building more homes is the simpler answer to address the housing issue in the country, other promises Trump has made could deter affordability efforts, experts say.

For instance, Trump has talked about enacting a mass deportation of immigrants in the U.S. But doing so might lead to higher building costs, as the construction industry depends on immigrant labor, said Jacob Channel, senior economist at LendingTree.

He also claimed that he would pull down mortgage rates back to pandemic-era lows, although presidents do not control mortgage rates, experts say.

Here’s how some of Trump’s policies could affect the housing market during his administration, according to experts:

1. Deregulation to increase affordability

At the end of Trump’s first presidency, he signed an executive order creating “Eliminating Regulatory Barriers to Affordable Housing: Federal, State, Local and Tribal Opportunities.”

“That could be a blueprint going forward,” said Dennis Shea, executive director of the Bipartisan Policy Center’s Terwilliger Center.

During his 2024 campaign, Trump called for slashing regulations and permit requirements, which can add onto housing costs for homebuyers. Experts say that regulatory costs trickle down to the prices homebuyers face.

“We will eliminate regulations that drive up housing costs with the goal of cutting the cost of a new home in half,” Trump said in a speech at the Economic Club of New York on Sept. 5.

About 24% of the cost of a single-family home and about 41% of the cost of a multifamily home are directly attributable to regulatory costs at the local, state and federal level, Tobin said.

“If we reduce the regulatory burden on home construction or apartment construction, we’re going to lower costs [for] the consumer,” Tobin said.

2. Impacts on construction workforce

Trump has also blamed rising home prices on a surge of illegal immigration during the Biden administration. However, experts say that most undocumented immigrants are not homeowners.

Instead, they live in homes owned by U.S. citizens, Channel said. If a mass deportation were to happen, such homes would remain occupied, he added.

Yet, proposals like mass deportations and tighter border control could impact housing affordability, Tobin said.

About a third, or 31%, of construction workers in the U.S. were immigrants, according to the NAHB.

“Anything that threatens to disrupt the flow of immigrant labor will send shock waves to the labor market in home construction,” Tobin said.

It’s been difficult to recruit native-born workers into the construction industry, experts say.

According to a 2017 NAHB survey, construction trades are an unpopular career choice for young American adults. Only 3% showed interest in the field, the poll found.

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Therefore, a mass sweeping of available workers can create a labor shortage in construction. And with fewer workers, wages might increase, which “will likely be passed onto consumers” through higher home prices, Channel said.

What’s more, it will take longer for construction companies to complete housing projects and therefore slow down efforts to increase supply, he added.

While “we are doing a better job” training the domestic workforce through trade schools, apprenticeship programs and other initiatives, the industry still heavily relies on immigrant labor, Tobin said.

3. Tariffs could hike building costs

Trump has proposed a 10% to 20% tariff on all imports across the board, as well as a rate between 60% and 100% for goods from China.

A blanket tariff at 10% to 20% on raw building materials like lumber could push housing costs higher, as well as materials for home renovations, experts say.

“Any tariffs that raise the cost of the products are going to flow directly to the consumer,” Tobin said.

On average, construction costs for single-family homes is around $392,241, according to a data analysis by ResiClub, a housing and real estate data newsletter.

“It depends on what the tariffs look like,” said Daryl Fairweather, chief economist at Redfin. “There could be varying impacts.”

Overall, homebuilders expect to construct about 1.2 million new single-family homes and around 300,000 multifamily units over the next year, Tobin said.

“We’re not quite building back up to the pace that we need to, but it’ll be higher,” he said. “It’ll be higher than this year.”

It might be too soon to tell if the Trump administration will prioritize housing costs as much as a Harris administration would have. And the aid Trump has mentioned might not help densely populated areas, said Fairweather.

Trump mentioned plans to release federal lands for housing, but federal lands tend to concentrate in rural areas, she said.

“That doesn’t do anything for these densely populated blue cities that really need the most help,” Fairweather said.

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Personal Finance

Trump plan to freeze funding stymies Biden-era energy rebates for consumers

Published

17 hours ago

February 26, 2025

Business Finance News

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Some states have stopped disbursing funds to consumers via Biden-era rebate programs tied to home energy efficiency, due to a Trump administration freeze on federal funding enacted in January.

The Inflation Reduction Act, passed in 2022, had earmarked $8.8 billion of federal funds for consumers through two home energy rebate programs, to be administered by states, territories and the District of Columbia.

Arizona, Colorado, Georgia and Rhode Island — which are in various phases of rollout — have paused or delayed their fledgling programs, citing Trump administration policy.

The White House on Jan. 27 put a freeze on the disbursement of federal funds that conflict with President Trump’s agenda — including initiatives related to green energy and climate change — as a reason for halting the disbursement of rebate funds to consumers.

That fate of that freeze is still up in the air. A federal judge issued an order Tuesday that continued to block the policy, for example. However, it appears agencies had been withholding funding in some cases in defiance of earlier court rulings, according to ProPublica reporting.

In any event, the freeze — or the threat of it — appears to be impacting state rebate programs.

“Coloradans who would receive the Home Energy Rebate savings are still locked out by the Trump administration in the dead of winter,” Ari Rosenblum, a spokesperson for the Colorado Energy Office, said in an e-mailed statement.

The U.S. Department of Energy and the White House didn’t return a request for comment from CNBC on the funding freeze.

In some states, rebates are ‘currently unavailable’

Consumers are eligible for up to $8,000 of Home Efficiency Rebates and up to $14,000 of Home Electrification and Appliance Rebates, per federal law.

The rebates defray the cost of retrofitting homes and upgrading appliances to be more energy efficient. Such tweaks aim to cut consumers’ utility bills while also reducing planet-warming carbon emissions.

California, the District of Columbia, Maine, Michigan, New Mexico, New York, North Carolina and Wisconsin had also launched phases of their rebate programs in recent months, according to data on an archived federal website.

All states and territories (except for South Dakota) had applied for the federal rebate funding and the U.S. Department of Energy had approved funding for each of them.

The Arizona Governor’s Office of Resiliency said its Home Energy Rebates programs would be paused until federal funds are freed up.

“Due to the current federal Executive Orders, memorandums from the White House Office of Management and Budget, and communications from the U.S. Department of Energy, funding for all Efficiency Arizona programs is currently unavailable,” it said in an announcement Friday.

Rhode Island paused new applications as of Jan. 27 due to “current uncertainty” with Inflation Reduction Act funding and executive orders, according to its Office of Energy Resources.

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The Georgia Environmental Finance Authority launched a pilot program for the rebates in fall 2024. That program is ongoing, a spokesperson confirmed Monday.

However, the timeline for a full program launch initially planned for 2025 “is delayed until we receive more information from the U.S. Department of Energy,” the Georgia spokesperson explained in an e-mail.

However, not all states have pressed the pause button: It appears Maine is still moving forward, for example.

“The program remains open to those who are eligible,” Afton Vigue, a spokesperson for the Maine Governor’s Energy Office, said in an e-mail.

The status of rebates in the eight other states and districts to have launched their programs is unclear. Their respective energy departments or governor’s offices didn’t return requests for comment.

‘Signs of an interest’

While the Trump administration on Jan. 29 rescinded its memo ordering a freeze on federal grants and loans — two days after its initial release — the White House said the freeze nonetheless remained in full force.

Democratic attorneys general in 22 states and the District of Columbia filed a lawsuit against the Trump administration, claiming the freeze is unlawful. The White House has claimed it is necessary to ensure spending aligns with Trump’s presidential agenda.

David Terry, president of the National Association of State Energy Officials, said he is optimistic the rebate funding will be released to states soon.

“For these two particular programs, I do not think [the freeze] will stymie the programs,” Terry said. “I see signs of an interest in moving them forward and working with the states to implement them.”

Personal Finance

Social Security Fairness Act benefit increases to arrive this spring

Published

19 hours ago

February 26, 2025

Business Finance News

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Lump sum payments to begin arriving in February

In a new update released on Tuesday, the SSA said it will begin issuing retroactive payments in February. Most people will receive the one-time payment by the end of March, according to the agency.

The SSA plans to process the increase to monthly benefits starting in April.

The new timeline “supports President Trump’s priority to implement the Social Security Fairness Act as quickly as possible,” Social Security acting commissioner Lee Dudek said in a statement.

“The agency’s original estimate of taking a year or more now will only apply to complex cases that cannot be processed by automation,” Dudek said. “The American people deserve to get their due benefits as quickly as possible.”

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Among those affected include some teachers, firefighters and police officers in certain states; federal employees who are covered by the Civil Service Retirement System and people who worked under foreign social security systems, according to the Social Security Administration.

What affected beneficiaries should know

Retroactive payments, which most people should receive by the end of March, will be deposited directly into bank accounts on file with the Social Security Administration.

All affected beneficiaries should receive a notice by mail from the Social Security Administration with details about their retroactive payment and new benefit amount. Those notices should come two to three weeks after the retroactive payments, according to the agency.

If your direct deposit information or current mailing address are up to date with the agency, no action is needed, according to the agency. If you want to double check the information the agency has on file, you may sign into your personal online account or call the agency.

If you want to ask about the status of your retroactive payment, the Social Security Administration urges you to hold off until April.

Beneficiaries should also wait until after they have received their April monthly check before contacting the agency to ask about their new benefit amount.

Personal Finance

The average IRS tax refund is 32.4% lower this season. Here’s why

Published

2 days ago

February 25, 2025

Business Finance News

The average tax refund is 10.4% lower than last year according to the latest Internal Revenue Service data, and inflation is taking more of those dollars.

Bill Oxford | E+ | Getty Images

The average tax refund this year is down 32.4% compared to last year, according to early filing data from the IRS.

Tax season opened on Jan. 27, and the average refund amount was $2,169 as of Feb. 14, down from $3,207 about one year prior, the IRS reported on Friday. That figure reflects current-year refunds only.

However, the Feb. 14 filing data doesn’t include refunds receiving the earned income tax credit or additional child tax credit, which aren’t issued before mid-February, the IRS noted. The previous year’s filing data included tax returns claiming these credits. The value of these tax breaks can be substantial, even resulting in five-figure refunds, in some cases.

Typically, you can expect a refund when you overpay taxes throughout the year via paycheck withholdings or quarterly estimated payments. By comparison, there’s generally a tax bill when you haven’t paid enough.

Filing season numbers will ‘even out’

Although the average refund is currently smaller, “historically, filing season numbers even out as more tax returns come in,” according to the agency.

As of Feb. 14, the IRS received roughly 33 million individual tax returns of the more than 140 million it expects before the April 15 deadline.

As of Dec. 27, 2024, the average tax refund for the 2024 season was $3,138, compared to $3,167 in late December 2023.

‘Don’t call the IRS’ for refund updates

The latest filing statistics come amid mass layoffs for the agency as Elon Musk’s so-called Department of Government Efficiency, or DOGE, continues to cull the federal workforce.

It’s unclear exactly how the staffing reduction could impact future taxpayer service. But experts recommend double-checking returns for accuracy to avoid extra touch points with the agency.

“Don’t call the IRS looking for your refund,” said Tom O’Saben, an enrolled agent and director of tax content and government relations at the National Association of Tax Professionals.

You can check the status of your refund via the agency’s “Where’s My Refund?” tool or the IRS2Go app, which is “available 24 hours a day,” O’Saben said.

Typically, the agency issues refunds within 21 days of a return’s receipt. But some returns require “additional review,” which can extend the timeline, according to the IRS.