On his first day in office, President Donald Trump signed an executive order directing federal agencies to implement “emergency price relief” aimed at reducing housing costs and expanding housing inventory. The order noted that regulatory requirements contribute to approximately 25% of new home construction costs, suggesting that eliminating unnecessary regulations could make housing more affordable. Industry groups, such as the National Association of Home Builders (NAHB), have praised the initiative, emphasizing the need to remove barriers that inflate housing costs and hinder the construction of affordable homes. However, experts caution that many regulatory burdens exist at the local level, which the federal government may have limited authority to influence.
PBG’s Peter Idziak says that uncertainty remains, given the order itself doesn’t provide any specific actions executive agencies must take to “deliver emergency price relief.” He believes it’s clear that the Trump administration plans a broad-based rollback of the energy-efficiency standards passed under President Biden, and that Trump believes these standards increase upfront costs without providing justifiable long-term benefits.
“The statistic cited in the order that 25% of new home construction is attributable to government regulation comes from a recent National Association of Homebuilders study,” said Idziak. “NAHB and 15 Republican state attorneys general are currently challenging the HUD/USDA 2024 energy-efficiency standards for new construction of single and multifamily homes in court. So, I expect these rules are first on the chopping block under the order. NAHB believes the new standards can increase construction costs up to $31,000, and the agencies themselves conceded in the rule that it would increase the costs of new construction by several thousand dollars. A rescission of the rules could result in significant cost savings to new home buyers.”
Idziak’s commentary was included in the following media coverage:
- Mortgage Professional America: What’s on Trump’s mortgage and housing chopping block?
- National Mortgage News: Trump’s executive order aims to lower housing costs