COMMENTARY: Rebuilding the American Dream of homeownership

When Donald Trump returned to the Oval Office, he pledged — on day one — to address the nation’s housing affordability crisis by lowering costs and increasing the supply of housing to put the American Dream of homeownership back within reach. Early signs suggest he’s making good on that promise.

A year ago, the 30-year fixed-rate mortgage was hovering above 7 percent, and purchase applications were declining. On May 22, Freddie Mac reported that 30-year mortgage rates are already 2.5 percentage points lower than they were right before Trump took office. Earlier in the month, Freddie Mac stated, “Rates are lower and have remained stable for weeks, sparking continued increases in purchase applications.”

The latest S&P Core Logic data, released May 27, found that home prices in the 20 largest metropolitan areas dropped for the first time in two years and that prices could fall further.

As a former federal housing commissioner during the first Trump administration, I’m not surprised the housing market is improving. The administration has aggressively promoted pro-growth housing policies, and, slowly but surely, they are proving effective.

Among the innovative approaches to boost housing supply is a joint task force — led by Housing and Urban Development Secretary Scott Turner and Department of Interior Secretary Doug Burgum — to identify underused federal land for residential developments. Because the federal government manages nearly 30 percent of all land in the United States, there’s ample opportunity to create a housing supply without adding more bureaucracy.

HUD’s housing policy expertise will be combined with Interior’s stewardship of more than 500 million acres to identify buildable sites — including vacant lots, former military bases or parcels near cities with existing infrastructure — while steering clear of national parks and sensitive ecological areas. HUD will identify high-demand regions in coordination with local and state officials, and Interior will facilitate the transfer or lease of land to localities to address housing needs, ensuring affordability remains central in the process.

Building on federal land offers a practical solution — no costly land grabs, no endless red tape — and creates a collaborative process between the public and private sectors. It’s such a compelling idea that it has garnered bipartisan support. Sen. Ruben Gallego, a Democrat from Arizona, applauded the initiative, calling it a “creative solution to housing shortages” in Western states.

Solutions to increase housing affordability continue to unite Republicans and Democrats. Sens. Todd Young, R-Ind., and Maria Cantwell, D-Wash., and Reps. Darin LaHood, R-Ill., and Suzan DelBene, D-Ala., have introduced the American Housing Credit Improvement Act. It would expand and strengthen the popular low-income housing tax credit, the nation’s primary tool for financing affordable rental housing. The tax credit embodies a successful public-private partnership. Since its creation in 1986, it has financed 4 million affordable homes.

These efforts are evidence that Republicans and Democrats understand the only way to address our housing shortfall is to build our way out of it. It’s a refreshing change from the prior administration, which too often sought to vilify private-sector solutions while vastly expanding government intervention at the federal level.

From misguided rent control measures to costly energy efficiency standards, the Biden administration’s blunders resulted in less building and more bureaucracy. At one point, the former president and his Department of Justice even blamed AI rent-pricing software, as though an algorithm was the cause of inflation. Blaming pricing software for inflation is like blaming your thermometer for a heat wave. The software merely reflects market conditions — it doesn’t create them.

Trump is targeting the real issue: the fact that America doesn’t have enough homes. His housing regulators are focused on solutions: embracing innovation, eliminating fraud and trusting the free market.

By focusing on building, the administration is creating more affordable housing the old-fashioned way — by increasing supply — and the results are speaking for themselves.

Len Wolfson served as the assistant secretary for congressional and intergovernmental relations and acting Federal Housing Administration commissioner from 2017 to 2020. He wrote this for InsideSources.com.