Trump Promises Bold Housing Reforms as Market Faces Changes

The US housing market may witness a significant shift in 2026, following years of high prices and limited affordability. Economists predict that rising incomes will begin to outpace home prices, making homeownership more attainable for many Americans. This optimism coincides with plans from the Trump administration to prioritize housing affordability, although specific details remain scarce.

Economists from various organizations, including Redfin, have referred to 2026 as “The Great Housing Reset,” while Compass has characterized it as the beginning of a “new era” for home sales. After a prolonged period of stagnant sales volumes, even a modest uptick in activity could indicate a turning point. Mike Simonsen, chief economist at Compass, emphasized that the market has been constrained, stating, “Fewer homes changed hands, but home prices kept relentlessly climbing.” He anticipates that increased inventory will lead to a rise in sales.

Home prices have surged nearly 55% nationwide since early 2020, according to the National Association of Homebuilders. The ongoing demand for housing has severely outstripped supply. Many potential sellers have been reluctant to list their homes, fearing the loss of the low mortgage rates they secured in previous years. As homeowners adapt to current rates above 6%, a wave of new listings may emerge, alleviating some price pressure.

Although some regions, such as Florida, Texas, and California, have seen declines in average home prices in 2025, a sharp nationwide drop is unlikely in 2026. Simonsen projects a modest 0.5% increase in home prices, meaning prices will likely remain stable rather than decline significantly. Nonetheless, many buyers may still feel priced out of the market.

Mortgage rates have trended downward in recent months. As of last week, the average 30-year fixed-rate mortgage was 6.18%, a notable improvement from the beginning of 2025, when rates were nearing 7%. Simonsen expects rates to remain above 6% next year, but acknowledges that shifts in the labor market or inflation could prompt the Federal Reserve to adjust rates. Consumer confidence plays a crucial role in the housing market; if job security diminishes, potential buyers may hesitate to commit to home purchases.

Renter relief was observed in 2025, with rental growth stabilizing after a period of rapid increases, as noted by Bank of America. For the first time in three and a half years, rents remained flat year-over-year in October. However, ongoing challenges in homeownership may keep demand for rentals high. Redfin estimates that rents could rise by 2% to 3% annually by the end of 2026.

In light of the anticipated changes, President Donald Trump recently announced plans to pursue what he described as the “most aggressive housing reform plans” in US history. While the administration has not provided extensive details, Kevin Hassett, Director of the National Economic Council, indicated that the focus will be on streamlining housing regulations. “There are a lot of things that we can do with regulations to try to help get stuff approved quicker,” he said during a television appearance.

White House spokesperson Kush Desai stated that homeownership remains a top priority on Trump’s affordability agenda, promising more information in the near future. Proposed ideas include a 50-year mortgage and portable mortgages, although experts like Jaret Sieberg, a housing policy analyst at TD Cowen, remain skeptical about the feasibility of these reforms in 2026.

As the US housing market braces for potential changes, both buyers and sellers are left to navigate a landscape marked by shifting dynamics and evolving policies. The coming year may prove pivotal as the balance between affordability and demand continues to evolve.