WASHINGTON — A fresh White House economic analysis released Monday reveals America faces a deficit of 10 million homes, with economists proposing regulatory reductions as the key to spurring more construction, stabilizing costs, boosting homeownership, and accelerating economic expansion.
The findings, included in the Economic Report of the President, present both political challenges and messaging opportunities for President Donald Trump, whose approval ratings have declined amid concerns over tariff policies, the Iran conflict, and unmet promises to reduce inflation and strengthen economic growth.
While Trump issued two executive orders in March instructing federal departments to ease housing regulatory barriers and simplify mortgage lending for smaller banks, he has moved slowly on additional measures that would demonstrate housing affordability as an administration priority.
For months, the White House has attempted to emphasize housing and affordability concerns in preparation for what many anticipate will be a difficult midterm election cycle for Republicans, though international crises have repeatedly disrupted this focus. A January World Economic Forum speech in Davos, Switzerland, originally planned to highlight housing policy, instead became dominated by Trump’s Greenland acquisition dispute.
Additionally, the Iran conflict has increased homebuying costs, with 30-year mortgage rates climbing from below 6% to 6.37%.
Trump has also expressed support for maintaining elevated home values to protect current homeowners’ investments. “I don’t want to drive housing prices down,” Trump told his Cabinet earlier this year. “I want to drive housing prices up for people that own their homes, and they can be assured that’s what’s going to happen.”
The housing section of the annual economic assessment, acquired by The Associated Press prior to publication, establishes a framework showing how increased home construction would benefit middle-class families and the broader economy, providing Trump with potential voter messaging.
Compiled by White House Council of Economic Advisers personnel, the report determines the nation would have 10 million additional homes if “homebuilding and the growth of the single-family housing stock had continued at their historical pace instead of falling dramatically” following the 2008 global financial crisis. That crisis stemmed primarily from widespread housing market defaults, where prices had been inflated by questionable lending practices.
The study highlights that home values have increased 82% since 2000, while wages have grown only 12% — a disparity previously hidden by historically low mortgage rates. However, when rates surged with post-pandemic inflation, monthly mortgage payments also increased for buyers, making homeownership — a traditional middle-class milestone — a primary concern for voters under 40.
The White House contends that March’s executive orders, combined with plans to acquire mortgage-backed securities, demonstrate the president’s commitment to housing issues.
The report identifies various home construction regulations, termed “the bureaucrat tax,” as adding over $100,000 to building expenses. These costs encompass recent building code modifications, compliance requirements, and zoning approval charges, among other expenditures.
According to the report’s calculations, reducing these regulatory expenses could stimulate construction of up to 13.2 million homes. This development could contribute an average of 1.3 percentage points to annual economic growth over the coming decade and support 2 million manufacturing and construction positions.
Trump might consider making federal funding to state and local governments dependent on regulatory reduction, according to an administration official who requested anonymity to discuss the unreleased report.
The analysis also criticizes green energy housing requirements implemented during the Biden administration as contributing to increased construction expenses. Those measures favored more efficient air conditioning systems and water heaters, along with enhanced ductwork standards.
However, eliminating some requirements could raise other long-term homeowner expenses, including utility costs.
The report references a 2021 National Association of Home Builders study indicating the standards could increase new home prices by up to $31,000, while homebuyers might need as long as 90 years “to realize a payback on the added cost of the home.”
The potential savings from reversing Biden-era housing standards remains uncertain due to ongoing legal challenges regarding enforcement and varying state practices. In March, a Texas federal judge sided with 15 Republican-led states arguing that federally backed housing standards were unlawful.
