Trump Issues Two Executive Orders to Tackle Housing Affordability Crisis

President Trump signed two executive orders Friday targeting housing affordability challenges facing voters ahead of November's midterm elections. The orders aim to reduce federal regulatory barriers for home construction and streamline mortgage processes to help more Americans achieve homeownership.

WASHINGTON — President Donald Trump put his signature on two executive orders Friday, demonstrating his administration’s focus on tackling housing affordability challenges that resonate with voters as November’s midterm elections approach.

The first directive instructs federal agencies to cut housing-related regulatory obstacles and establish incentive programs encouraging best practices among state and local authorities, with the objective of simplifying the home construction process for builders. The second order targets mortgage-related regulatory requirements and aims to help smaller community banks expand their home lending capabilities.

A draft version of the order stated, “Layers of unnecessary regulatory barriers, slow permitting processes, and onerous mandates at all levels of government have delayed construction, restricted development, and driven up the costs of new housing. These constraints have made housing less affordable for many Americans.”

These executive directives — exclusively obtained by The Associated Press — demonstrate the Trump administration’s renewed policy focus on promoting homeownership opportunities. Housing costs have become a critical political issue affecting both Republican and Democratic lawmakers, who are working to develop legislation showing their responsiveness to concerns that first-time home purchases have become increasingly difficult for middle-income families.

The Senate approved comprehensive bipartisan housing legislation Thursday, which aims to modify policies for increased construction while limiting institutional ownership in residential development. The bill’s future in the House remains uncertain, though the White House expressed support for the measure in a March 2 statement.

Questions remain about how rapidly federal initiatives can stimulate new construction or substantially lower mortgage expenses, given that primary regulatory challenges in housing development stem from state and local policy decisions, while mortgage rates respond to financial market fluctuations.

Years of construction shortages have maintained elevated prices, while mortgage rates that surged following the pandemic have prevented many renters from purchasing homes and discouraged current owners from selling their properties.

Trump’s first executive order directs federal agencies to develop incentive programs accelerating permitting timelines for state and local authorities, including reducing “green” building requirements, minimizing design and construction mandates, and facilitating innovative building techniques.

The directive focuses significantly on federal environmental regulations, instructing the EPA and Army secretary to examine and revise stormwater, wetlands, and other water-related permitting standards to lower costs and improve home insurability.

The Commerce, Housing and Urban Development, and Transportation departments, alongside the Federal Housing Finance Agency, must eliminate regulations and modify programs that hinder residential development. Various federal agencies will also work to remove environmental and energy efficiency rules that might increase expenses and limit home construction.

White House officials indicated that Biden-era energy efficiency requirements in HUD and Agriculture department guidelines could increase housing construction costs by up to $9,000. These officials spoke anonymously to detail the orders before signing, noting that additional federal regulations would impose even greater costs on participants.

The Advisory Council on Historic Preservation will simplify its historic review guidance, while the federal government will work to align its New Markets Tax Credit program with Opportunity Zone tax incentives established during Trump’s initial presidency.

The order avoids changing state and local zoning regulations, as the administration prioritizes preserving suburban housing rather than increasing housing density.

White House officials explained that federal agencies can include housing regulation best practices as criteria for awarding discretionary grants to state and local governments. One best practice example would require local governments to approve building permits within 60 days. The administration views this order as providing long-term benefits for homebuilders and purchasers.

The second directive seeks to simplify mortgage procedures, instructing the Consumer Financial Protection Bureau to modify mortgage guidelines enabling smaller banks to increase lending activities. The CFPB will update Home Mortgage Disclosure Act requirements to reduce regulatory burdens for mortgage acquisition, among other instructions.

The administration believes these mortgage regulation changes will increase the number of financial institutions competing to offer home loans, thereby reducing borrowing costs for buyers. The White House asserts that these modifications will maintain mortgage market financial safety and stability.

White House officials anticipate that prospective homebuyers could experience the effects of mortgage regulation changes within months.

Elevated home prices have become a significant concern for voters under 40 heading into this fall’s midterm elections.

According to the National Association of Realtors, the median price for existing homes sold in February reached $398,000. This figure represents nearly five times the median household income, compared to the historical benchmark of homes costing approximately three times household income.

The National Association of Realtors reported that the average 30-year mortgage rate in February was 6.05%, declining from 6.84% the previous year.

While reduced borrowing costs have improved monthly payment affordability, rates remain significantly higher than the sub-3% averages experienced in 2020 and 2021 when the economy struggled with coronavirus pandemic impacts.

Trump has primarily addressed home affordability challenges by directing government-controlled mortgage companies Fannie Mae and Freddie Mac to purchase $200 billion in mortgage bonds.

He has also advocated for restricting financial institutions’ ability to purchase homes and implementing credit card interest rate caps, arguing both measures would facilitate home purchases.

However, the president has previously opposed dramatically increasing construction, suggesting such action could reduce home prices and existing owners’ net worth. This position requires him to balance maintaining price growth while expanding ownership opportunities for current renters.

“People that own their homes, we’re going to keep them wealthy,” Trump stated during his January Cabinet meeting. “We’re going to keep those prices up. We’re not going to destroy the value of their homes so that somebody that didn’t work very hard can buy a home.”