The property market in the United States (US) is said to be the path of affordability as part of what has come to be known as ‘Trump effect’ in the country.
Donald Trump, the country’s president-elect, is a real estate mogul. Trump did not come into real estate by accident as his father, Fred Trump, was also a real estate businessman.
The US real estate market, which has been having difficult times as a result of rising inflation and high mortgage rates, is said to be turning the corner over expectations that the new president would walk his talk and also bring his experience and influence to bear on the market.
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During his campaigns in the build-up to the election that gave him the presidential victory, Trump pledged to open up tracks of federal land for housing construction, noting that his government would “desperately need housing for people who can’t afford what’s going on now.”
He reasoned that building more homes was the simpler answer to addressing the housing issue in the country, promising that he would address housing affordability in the US by fomenting the construction of new homes.
“We’re going to open up tracks of federal land for housing construction,” Trump was quoted to have said at a news conference.
Jim Tobin, president and CEO of the National Association of Home Builders (NAHB), agreed with him, stressing that “the prescription for that crisis is more building.”
The Trump presidency and the expected positive impact are good news for many Nigerians and other foreigners who have invested in the US real estate market. It is expected that his housing policy, which will favour affordability, will encourage more citizens and immigrants to buy homes.
Gbenga Adebayo, a Nigeria realtor who has part of his practice in the US, said in a telephone interview with BusinessDay that Trump, in his first term, believed that deregulation could increase affordability, which was why he signed an executive order creating ‘Eliminating Regulatory Barriers to Affordable Housing: Federal, State, Local and Tribal Opportunities.’
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He explained that during his 2024 campaign, Trump called for slashing regulations and permit requirements, which could add to housing costs for homebuyers, noting that regulatory costs trickle down to the prices homebuyers face.
“We will eliminate regulations that drive up housing costs with the goal of cutting the cost of a new home in half,” Trump was quoted as saying in a speech at the Economic Club of New York.
Tobin noted that “about 24 percent of the cost of a single-family home and about 41 percent of the cost of a multi-family home are directly attributable to regulatory costs at the local, state and federal level, arguing, “if we reduce the regulatory burden on home construction or apartment construction, we’re going to lower costs for the consumer.”
However, Trump believes that rising home prices are on the surge as a result of illegal immigration during the Biden administration.
However, experts say that most undocumented immigrants are not homeowners. Instead, they live in homes owned by U.S. citizens. Adebayo, earlier quoted, argues that if a mass deportation were to happen, such homes would remain occupied.
Tobin believes that proposals for mass deportations and tighter border control could impact housing affordability while NAHB pointed out that about a third or 31 percent of construction workers in the US are immigrants.
“Anything that threatens to disrupt the flow of immigrant labour will send shock waves to the labour market in home construction,” Tobin said, adding that it has been difficult to recruit native-born workers into the construction industry.
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According to a 2017 NAHB survey, construction trades are an unpopular career choice for young American adults and it is such that only 3 percent showed interest in the field, the poll found.
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