The Donald Trump administration is considering a tough measure called the 'Housing Emergency' declaration to address skyrocketing housing prices in the United States. The plan is to bypass Congressional legislative procedures by utilizing presidential executive authority to loosen regulations that hinder housing supply and lower expenses to stabilize the market. Experts analyzed that this also has a political strategy to elevate the housing issue, which is the top concern for Americans, as a key policy agenda ahead of the 2026 midterm elections.
Scott Bessent, the U.S. Treasury Minister, noted in an interview with Reuters and the Washington Examiner on the 1st that "Trump could declare a national housing emergency this fall." He defined the current situation as a crisis where "all hands on deck" are needed and stated, "We will announce new measures within weeks."
In the United States, a national emergency is a means for the president to broadly mobilize executive power without Congressional approval. Trump has declared a state of emergency nine times already for reasons related to immigration, trade, and crime issues in Washington, D.C.
The background to the White House considering a state of emergency includes a severe shortage of housing supply and a transaction freeze due to high-interest rates. During the COVID-19 pandemic, many Americans bought homes with historically low mortgage rates of 2-3%. After that, as the Federal Reserve began to sharply raise interest rates to control inflation, the current new mortgage rates skyrocketed to around 6-7%. As a result, existing homeowners are unable to move if they wish to sell their homes because they would need to take out new loans at much higher rates to purchase new homes at similar prices. Ultimately, the 'Lock-in effect' of mortgage rates is causing an extreme supply shortage in the U.S. where many want to buy homes, but there are few homes for sale.
The Trump administration is exploring various solutions to address this issue. Minister Bessent presented three major measures. The first is to expand housing supply. The plan is to standardize the building and zoning regulations that vary by state, county, and local government at the federal level and simplify the permitting process to promote new dwelling construction. There are also discussions about opening federal government-owned land for housing development.
The second is expense reduction. The administration is considering lowering the closing costs associated with purchasing dwellings and temporarily exempting tariffs on construction materials. This is a partial revision of the previous policy that imposed high tariffs on timber, steel, and copper.
Lastly, there is pressure on the Federal Reserve. Trump has repeatedly argued that the high-interest policies of the Federal Reserve have harmed the housing market and has demanded a rate cut. Minister Bessent also pressured the Federal Reserve to change its policy, stating, "When interest rates start to decline, real estate transactions and housing sales will increase."
This comprehensive policy push seems to be aimed at the 2026 midterm elections. Minister Bessent stated, "Ensuring the affordability of home purchases will be a key pillar of the Republican midterm platform." The housing issue is the top concern for American voters. In the 2024 presidential election, then-Vice President Kamala Harris, the Democratic candidate, prominently featured real estate prices as a major pledge. This is why the Trump administration has turned to the drastic remedy of declaring a 'state of emergency' instead of enduring a tedious legislative battle with Congress.