By Phil Ganz
Edited by Ryan Skerritt
The mortgage market, like many sectors, is sensitive to changes in federal economic policy.
As Donald Trump campaigns with a set of proposals for 2024, his economic policies are raising questions about potential shifts in mortgage rates, housing affordability, and demand.
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This article will explore Trump's key policies, their expected influence on the housing market, and offer insights into what homeowners, prospective buyers, and lenders might expect.
Trump Will Extend the Tax Cuts and Jobs Act of 2017
One of Trump’s central policy promises is to extend the Tax Cuts and Jobs Act (TCJA) of 2017, preserving the increased standard deduction and the reduced marginal tax rates introduced during his previous administration.
By extending the TCJA, Trump aims to ensure that households can continue to benefit from more favorable tax deductions and lower tax burdens, which could indirectly impact homeowners’ ability to meet their mortgage payments.
How This Impacts Homebuyers
Estimated Benefit: $1,800 to $2,200 per year in tax savings, which can support mortgage affordability.
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Trump Will Eliminate the Cap on State and Local Tax (SALT) Deductions
Another significant proposal is Trump’s plan to eliminate the $10,000 cap on state and local tax (SALT) deductions.
This policy change would particularly benefit homeowners in high-tax states such as California and New York, who are currently limited in their ability to deduct their state and local taxes on federal returns.
How This Impacts Homebuyers
Estimated Benefit: $1,000 to $3,000 annually for homebuyers in high-tax states, depending on local tax rates, which can improve affordability and increase homeownership appeal in these regions.
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Trump Will Reduce Corporate Tax Rates to 15% for U.S.-Made Products
Trump has also proposed reducing the corporate tax rate to 15% for products manufactured in the U.S.
By incentivizing domestic production, this policy aims to stimulate economic growth, increase job availability, and, ideally, improve wages.
How This Impacts Homebuyers
Estimated Indirect Benefit: $500 to $1,500 per year for average homebuyers, through potential wage growth and increased job security, improving buying power and mortgage accessibility.
Trump Will Impose Tariffs on Imports
Trump’s proposed tariffs include a 10-20% tariff on all imports, with up to 60% on goods imported from China. This policy aims to protect domestic industries but could raise the cost of imported materials, impacting industries that rely heavily on foreign goods, such as housing construction.
How This Impacts Homebuyers
Estimated Additional Cost: $8,000 to $12,000 added to new home construction costs, translating to a roughly $40 to $70 increase in monthly mortgage payments for buyers of newly constructed homes, reducing affordability.
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Trump Has a Plan for First-Time Homebuyers
Donald Trump’s proposed 2024 first-time homebuyer program focuses on making homeownership more accessible for Americans by implementing targeted tax incentives, reducing regulatory burdens, and unlocking federal lands for new housing developments.
With these measures, the program aims to lower homebuying costs and boost the supply of affordable homes, particularly in areas where demand has outpaced availability.
By cutting red tape and offering financial incentives, Trump’s plan intends to create a pathway for first-time buyers to enter the market more affordably and secure a stable foothold in the housing sector.
Trump Will Implement Mass Deportations
One of Trump’s more controversial proposals is to initiate large-scale deportations, which could affect both the labor force and housing demand, particularly in regions with high immigrant populations.
How This Impacts Homebuyers
Estimated Impact: Potential $5,000 to $10,000 increase in new home construction costs due to labor shortages, translating to about $30 to $60 per month in additional mortgage payments, affecting affordability for newly built homes.
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Trump Will Reduce Regulations on Housing Development
Trump’s plan to reduce regulatory barriers in housing development aims to alleviate the nation’s housing shortage by making it easier to build new homes. By lowering construction-related regulatory costs, this policy intends to stimulate housing supply and address housing affordability.
How This Impacts Homebuyers
Estimated Benefit: 3% to 5% decrease in home prices in high-demand markets, potentially saving homebuyers $6,000 to $10,000 on average purchase price, or $30 to $50 per month on a mortgage.
Trump Will Open Federal Land for Construction
Trump has proposed opening federal land for residential construction to help increase housing supply and address affordability issues. This approach aims to provide developers with more land options, particularly in high-demand areas where land is scarce and costly.
How This Impacts Homebuyers
Estimated Benefit: $5,000 to $15,000 reduction in home prices due to increased supply, potentially lowering monthly mortgage payments by $25 to $75, depending on location and demand.
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Overall Impact of Trump’s Economic Policies on Home Buyers
Trump’s proposed economic policies could result in substantial financial benefits for home buyers, increasing their purchasing power, reducing monthly mortgage payments, and creating long-term savings.
Combined, these policies could save the average home buyer around $3,300 to $6,700 annually, with additional one-time savings of $5,000 to $25,000 on the purchase price.
For a typical buyer, this could translate to $30,000 to $60,000 more in purchasing power, enabling them to afford a larger home or move into a more desirable area.
Alternatively, they could use these savings to lower monthly payments by $275 to $560, providing added financial flexibility.
Over the life of a 30-year mortgage, the cumulative effect of these policies could yield total savings of $126,000 to $246,000, allowing home buyers to retain more wealth and making homeownership significantly more accessible.
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Maximizing Homeownership Savings with Trump’s Economic Policies and Florida’s Assistance Programs
By combining Trump’s proposed economic policies with Florida’s robust down payment assistance programs—such as Hometown Heroes, FHA loans, and VA loans—first-time homebuyers can significantly boost their purchasing power and reduce their financial burdens.
Programs like Hometown Heroes can provide up to $35,000 in down payment assistance, while FHA and VA loans offer low down payment options and competitive interest rates, especially for those with moderate credit.
When layered with Trump’s proposed tax benefits and reduced regulatory costs, these programs create an opportunity for even greater savings, potentially adding $5,000 to $15,000 in upfront affordability.
This synergy could allow Floridians to afford higher-quality homes, lower their monthly payments by hundreds, and retain wealth through increased long-term savings, making homeownership more accessible than ever.
With over 50 years of mortgage industry experience, we are here to help you achieve the American dream of owning a home. We strive to provide the best education before, during, and after you buy a home. Our advice is based on experience with Phil Ganz and Team closing over One billion dollars and helping countless families.
About Author - Phil Ganz
Phil Ganz has over 20+ years of experience in the residential financing space. With over a billion dollars of funded loans, Phil helps homebuyers configure the perfect mortgage plan. Whether it's your first home, a complex multiple-property purchase, or anything in between, Phil has the experience to help you achieve your goals.
About Editor - Ryan Skerritt
Ryan Skerritt has over 10+ years of experience in the residential financing space. With over two hundred and fifty million of funded loan volume, Ryan has the skill set to help any homebuyer configure the perfect mortgage plan.
