President Donald Trump said Tuesday that he’s weighing a national housing emergency declaration to confront the deepening affordability crisis, as soaring home prices push more Americans out of reach of ownership.
“We’re thinking about doing that,” Trump said during a press conference, though he did not offer specifics and the White House declined to comment Wednesday when reached by Homes.com.
Separately, Treasury Secretary Scott Bessent said on Monday that the move could come as soon as this fall, though he also didn’t detail the specific actions under consideration. The Treasury also declined to comment.
If declared, the national housing emergency would be the first since the collapse of the housing bubble during the 2008 financial crisis.
What happens when a president declares a national emergency?
The president can declare a national emergency under the 1976 National Emergencies Act. The legislation does not provide a specific definition for “emergency.” Instead, it gives the president broad discretion to declare one in response to an extraordinary situation that is considered a threat to Americans and cannot be resolved by existing laws.
During a national emergency, the president gains access to 137 statutory powers. Additionally, 13 statutory powers may become available if Congress declares one. Trump has declared nine national emergencies since starting his second term. Most of them have touched on issues such as immigration and trade. He also used his emergency powers to deploy the National Guard to deal with crime in Washington, D.C., and to raise tariffs. But several of those emergency powers — the tariffs and National Guard deployment among them — are being challenged in court over the very definition of an emergency.
Congress can step in and end a national emergency by passing a law, but the president can veto it. It would take a supermajority to override the veto. A national emergency can continue indefinitely if it is renewed each year.
What is Trump's housing agenda?
When Trump stepped into his second term, he ordered the executive branch to “deliver emergency price relief” for American consumers. Trump directed all executive departments and agencies to pursue certain actions that “lower the cost of housing and expand housing supply” and reduce other household expenses.
Since then, the administration has made moves to push for more housing affordability. At Tuesday's press conference, the president continued to condemn the Federal Reserve for not cutting rates to aid the sluggish housing market. Remember, the Fed doesn’t set mortgage rates, but their actions influence them.
The Fed signaled that it may cut interest rates at its meeting Sept. 16 and 17. This announcement comes as mortgages rates hit their lowest level this year, according to mortgage giant Freddie Mac. The 30-year fixed mortgage rate has fallen in five of the past six weeks.
Can the emergency powers be used to boost the housing supply?
The administration has also vowed to do just that. Government regulations account for nearly 25% of the cost of building a new single-family home, according to the National Association of Home Builders trade group. This means about 14 million American households are priced out of the market for a new home due to government regulations, NAHB says.
"The administration can help spur more construction by leading deregulatory efforts at all levels of government, ensuring a secure and affordable supply chain of building materials and enacting policies that address a lack of skilled labor in construction,” NAHB chairman Buddy Hughes told Homes.com in a statement.
“A proactive agenda to bring down material, construction and labor costs will also help bring down overall inflation, increasing the odds of interest rate reductions and lower mortgage rates for consumers,” he added.
Could they be used to incentivize homebuilding?
As part of his statutory powers, Trump could bring relief to builders by nixing the tariffs on home construction materials.
The affordability crisis comes as more Americans struggle to buy a home. Data from the National Association of Realtors has the Housing Affordability Index below 100, signaling the typical family earns less than what’s needed to afford a median-priced home.
“It's an unprecedented policy move,” Jeff Tucker, principal economist at Windermere Real Estate, told Homes.com. The declaration “signals that housing affordability is a major priority for the administration and they recognize this is one of the biggest complaints that Americans have about the economy right now. Homeownership has very rapidly gotten out of reach for everyday middle-class workers.”
Could they be used to ease red tape?
Federal policy could pressure states and localities to streamline permitting timelines to accelerate housing construction.
“The big challenge here is that so many of the supply restrictions, permitting and zoning are all set at the local or, at best, state level. So federal policy doesn't often have a huge role to play there,” Tucker added.
According to experts, federal efforts could include a tax credit. In 2008, during the financial crisis, the Obama administration enacted a tax credit for first-time homebuyers. However, similar steps would require congressional action, and it’s unclear whether legislators will move in that direction.
The NAR said it will “remain in close contact with the White House and engaged in ongoing discussions on practical solutions to expand housing opportunities.”
“If a national housing emergency is declared, NAR stands ready to work closely with the administration, Congress and state and local leaders to advance targeted reforms that increase inventory, improve affordability and keep homeownership within reach,” said Shannon McGahn, the organization's executive vice president and chief advocacy officer.
