New Trump Homes program aims to build a million new housing units for first time buyers.
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Inflation was a decisive issue in the 2024 presidential election and while much of the focus was on the price of eggs and gas, housing affordability was a major pain point too. Both candidates discussed it on the campaign trail, and the Trump administration has announced several programs in recent months to make home-buying easier and more affordable. One of them, dubbed Trump Homes, aims to provide up to 1 million new entry-level houses for first time buyers. According to industry watchers and professionals, these are the early takeaways.
Background
The White House is reaching out to some of the nation’s largest homebuilders to participate, according to a February 4 article on Realtor.com. “The reported plan for Trump Homes follows President Donald Trump’s call last fall for major homebuilders to dramatically boost construction to address the housing affordability crisis,” the site reported.
That call compared “big homebuilders” to the OPEC oil cartel keeping oil prices high in a post on the president’s Truth Social site, writing, “They’re sitting on 2 Million empty lots, A RECORD. I’m asking Fannie Mae and Freddie Mac to get Big Homebuilders going and, by so doing, help restore the American Dream!” (Capitalization is original to the president’s post.)
With the typical first-time homebuyer today being 40 years old, according to the National Association of Realtors, Trump is clearly hoping to make homeownership available and affordable to more Americans in their 20s and 30s. It’s an ambitious and admirable goal to support family starts, and this president has extensive building and real estate experience, which can be helpful in hitting the target.
“Homeownership is crucial for stability and healthy life,” according to a 2024 research report published on the CDC’s Preventing Chronic Disease site. If the president and his program succeed in making homeownership attainable for a million more young adults, couples and families during his term, that would benefit them and society overall. What are its prospects of success?
Relevant Trump Home Concept Components
1. Increased Inventory
The president is right to call for more construction, but that may not solve the issue, Jack Kelley, a senior consulting associate at John Burns Research & Consulting, points out. “More inventory would absolutely help as the market faces a structural shortage of homes. But for first-time buyers, it’s important to distinguish ‘inventory’ broadly from ‘attainable inventory.’”
Kelley notes that much of the inventory builders are sitting on is priced beyond what first-time buyers can afford at current mortgage rates. He adds that “new homes represent only a fraction of total transactions in most markets, so increases in builder inventory alone do not fully address first-time buyer constraints. For young buyers, the binding constraints remain the monthly payment and qualifying income hurdles, not simply whether homes exist on paper.”
Rob Chrane, CEO of Down Payment Resource, which works with first-time buyers on becoming homeowners, makes the same point. “Expanding entry-level housing supply would help address a real shortage for first-time buyers, but execution matters.”
2. Mortgage Program Revisions
The Realtor.com article observed that the million home plan might require changes to the mortgage guarantees offered by federally controlled mortgage giants Fannie Mae and Freddie Mac. “Policies that make it easier for lenders to pair conventional mortgages with down payment assistance would do far more to expand access than broad credit expansion,” Chrane responds.
Kelley suggests that the most helpful adjustments would be targeted at making borrowing easier for first-time buyers without loosening credit, which might push prices higher by increasing competition. Ideas he suggests “could include reducing loan-level pricing adjustments that disproportionately affect low-down-payment borrowers, expanding support for smaller-format or manufactured housing, or targeting support toward newly built entry-level supply.”
3. National Homebuilder Involvement
“National builders are uniquely positioned to do this because of economies of scale and their ability to offer incentives, such as rate buydowns, to keep sales moving,” Kelley comments, and I largely agree. However, I have yet to see specific large builder companies commit to the program, and one cited in recent announcements reported that it is not yet working on it. I reached out directly to a Top 10 builder known for constructing starter homes across the country and received a ‘no comment at this time’ reply.
John McManus, publisher of The Builder’s Daily, wrote this in a February 3 article on the site: “In an environment starved for credible, scalable solutions to America’s housing affordability crisis, mischaracterizing what is in motion versus what is merely ‘being floated’ or theorized risks obscuring the real problem: there is currently no grand, coordinated federal-homebuilder initiative underway – despite months of investment in conversations, proposals, and strategic exploration.”
4. Rent-To-Own Concept
One of the concepts being discussed has a tenant renting a newly built-home for a set period, maybe two or three years, with the rent converting to down payment dollars. McManus noted in his article that it’s not an easy model for builders to develop or execute at scale, while also reporting that the funders of such a plan may be institutional investors and/or single family rental investors, rather than the builders themselves.
Bring On More Builders
“The 100 largest home builders in the US now account for about half of all new single-family home sales, up from just over a third two decades ago,” reported Harvard’s Joint Center for Housing Studies in an April 19, 2022 Housing Perspectives post. (This is the same trend that the national homebuilders association reported last year.) The volume is large, but does leave room for smaller firms to play a role. I contacted a regional builder in South Texas with a solid track record of starter home success to see if the 1 million home concept could work for firms like his.
“Yes, I do think there are opportunities for regional builders, but it depends heavily on where and how a program like this is implemented,” Doug French, CEO of Stylecraft, says. It’s not about size, he declares; it’s about geography. “In many of the markets where large national builders are concentrated there is already significant lot supply and standing inventory,” he explains.
Adding more supply into top 10 markets doesn’t meaningfully address affordability challenges at this point in the cycle, the builder adds. “A broader approach that allows regional builders to participate and targets the markets that are truly supply constrained would be far more likely to deliver meaningful results.”
OK, so what does that look like for millions of home-hungry Millennials and older Gen Z adults? “Where I see a real opportunity for regional builders is in smaller or historically lot constrained markets,” French shares. “Regional builders often have deep municipal relationships, strong local knowledge, and more nimble land strategies that allow them to move projects forward in these environments,” he suggests. With remote work making it possible for many professionals to telecommute, this has real promise for affordable housing solutions for first-time buyers.
Last Words
As a wellness design consultant and Mayo Clinic Certified Wellness Coach, I believe strongly in the power of home to support health, safety, stability and wellbeing. That’s why I want to see a program like this not just hit its goal, but smash through it for millions of first time buyers across the country. I agree with Kelley’s insight below that it won’t be easy, but it is worth doing.
“A headline target like ‘1 million homes’ is a heavy lift,” Kelly says, and points to an all-American quandary, which he unironically refers to as a “political tension.” Simply put, in addition to the health, education and social benefits of homeownership is the much-vaunted prospect of creating household wealth through equity. “Building enough supply to materially improve affordability would put downward pressure on prices, which conflicts with rhetoric emphasizing keeping homeowners wealthy through rising values,” the analyst explains. “So I could see elements of the concept, such as builder incentives and financing tweaks, moving forward, but a sweeping branded national rollout seems uncertain.”
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Author’s note: Chrane, French and Kelley were all interviewed by email between February 5 and February 9.
