Trump ‘relief’ order short on specifics, but builders are hopeful 

The National Association of Home Builders was pleased by the new administration's pledge to limit regulations on housing construction.

On his first day in office, President Donald Trump signed an executive order that aims to deliver "emergency price relief" to Americans, calling out costly housing regulations as a contributor to high home prices. The memo states that regulatory requirements account for 25% of home construction costs. 

The order didn't offer specific plans other than directing agencies to deliver on its promises.

NAHB applauds prioritization of housing issues: Carl Harris, chairman of the NAHB, said in a statement that making housing a national priority is an important step in tackling what he called the housing affordability crisis.

"The only way out of this crisis is to remove barriers like unnecessary and costly regulations that are raising housing costs and preventing builders from building more attainable, affordable housing," Harris said.

The NAHB has its own 10-point plan addressing housing affordability, which the organization will push as it works with the Trump administration and Congress, Harris said. 

Along with reducing "excessive regulations," the plan includes suggestions for fixing building material supply chain issues, expanding the production of affordable housing through federal legislation and making it easier for builders to obtain financing.

Federal workforce changes could impact D.C. housing market: Trump also issued executive orders that include a federal worker hiring freeze, a return-to-office mandate for existing employees, and the elimination of diversity, equity and inclusion (DEI) offices, positions, initiatives and contracts.

If those orders result in a smaller federal workforce, that would have an outsized impact on the Washington, D.C. economy and housing market compared to other parts of the country, said Lisa Sturtevant, chief economist at Bright MLS.

"Demand for housing in the metro area would cool, setting up the potential for a drop in home prices," Sturtevant said, noting that the median price for a home in the D.C. metro area was $590,000 in December — a 30% increase from five years ago.

The back-to-office mandate is expected to be challenged by unions, but if the policy does go into effect, it will also shift housing dynamics in the region, possibly offsetting the impact of job losses.

"If federal workers are required to be in the office five days a week, expect a resurgence of interest in homes near employment centers such as the District of Columbia and near transportation and transit," Sturtevant said. 

"Some workers who moved further out during the pandemic will be looking to sell and move closer in once they are required to commute to the office five days a week."

Are tariffs coming? Trump campaigned on the promise of raising tariffs, and while he didn't announce any on his first day in office, he did threaten to impose 25% fees on Mexico and Canada starting Feb. 1. 

Since those North American neighbors are the U.S.'s biggest trading partners, tariffs are expected to increase the price of many consumer goods, including building materials. It's also likely that targeted countries will retaliate with tariffs of their own. If prices rise, that could lead to inflation as well as higher interest and mortgage rates.

Immigration policy changes: The new administration also rolled out several immigration-related orders on Jan. 20, but it will take some time to see how they affect the construction industry.

Larger states with a high share of immigrants in the construction labor force will likely be impacted soonest. The states with the highest percentages of migrant workers are California (40%), Texas (40%), Florida (38%) and New York (37%), according to the NAHB.