With President Donald Trump back in the White House, big economic shifts could be coming for housing and job markets across the country.
From tariffs on building materials to deregulation in housing and a renewed push for domestic manufacturing, the policies soon to come out of Washington could shape everything from mortgage rates to job opportunities in key industries. We talked to experts and broke it all down so you know what to expect and how to stay ahead.
Three Ways Trump’s New Policies Could Shake Up Housing Costs
The U.S. housing market is already struggling with a massive shortfall—some 3.7 million homes are needed to meet demand, according to Freddie Mac. And with 30-year mortgage rates sitting above 7%, affording a home has become more challenging than ever.
Trump’s latest executive orders and his plan to raise tariffs by February 1 could bring consequential changes to the housing market. Additional key areas to watch include deregulation, and immigration policies, each with potential impacts on housing supply and affordability.
Here’s a closer look at what these moves could mean for buyers and renters alike.
Related: Compare today’s mortgage rates.
Trump’s Deregulation Plans Face a Major Obstacle: State Control
Buying a home isn’t getting any easier, and Trump says he knows why: Too much government red tape. This week, he signed an executive order, “Delivering Emergency Price Relief for American Families and Defeating the Cost-of-Living Crisis,” aimed at cutting regulations he claims add 25% to construction costs, making homes unaffordable for many Americans.
Trump argues that excessive regulations have pushed prices to historic highs, and his administration aims to remove federal roadblocks and bring costs down. While experts agree that cutting red tape could help, the reality is more complicated.
“Deregulation in the housing market is critical to improving affordability,” says Andra Ghent, professor of finance at the University of Utah and Ivory-Boyer Chair in Real Estate. “Most U.S. cities only allow single-family housing on 80% or more of their land, which severely limits how much housing we can build near jobs.”
Nevertheless, Trump’s order can only do so much. Cities and states set the rules on lot sizes, density restrictions and parking requirements, which can make it nearly impossible to build inexpensive multi-family housing in many areas.
Ghent adds that local regulations—like zoning laws, building codes and permit processes—have a weightier impact than federal rules. These policies dictate what can be built, how long it takes and ultimately, how much it costs.
“Unfortunately, land use regulation is constitutionally a state power rather than a power of the federal government,” Ghent says. “It’s really up to states to take back land use power they have delegated to cities to improve affordability.”
Still, some experts believe a federal push could encourage states to take action. If Trump’s policies can reduce construction costs—such as easing environmental reviews or simplifying approval processes—at the federal level it might give developers more flexibility to build cheaper homes.
But potential roadblocks remain. Trump’s order on affordable housing offers broad directives but few specifics, instructing agencies to “lower the cost of housing and expand housing supply” and report progress within 30 days. However, the timeline for meaningful change remains uncertain, and the order’s impact could face significant legal and logistical hurdles.
Tariffs on Building Materials: Raising Prices Instead of Lowering Them?
Trump has signaled potential tariffs—some as high as 25%—on imports from China, Canada and Mexico starting February 1, aiming to address issues like illegal immigration and fentanyl trafficking.
While the intent is to bolster domestic industries, history shows that such tariffs often lead to higher consumer costs, particularly in the housing market.
Take, for instance, the 2018 tariffs on Canadian softwood lumber. These measures led to a significant spike in lumber prices, adding an average of $9,000 to the cost of a new single-family home, according to the National Association of Home Builders. Similarly, tariffs on Chinese goods, including essential construction materials like nails and wiring, increased building costs, which were passed on to homebuyers.
Adam Hamilton, CEO of REI Hub, a real estate investment accounting platform, said higher tariffs on building materials will drive up construction costs, potentially slowing development and shifting focus to higher-end homes. “Less new construction means demand keeps outweighing supply, and that keeps the power firmly in sellers’ hands.”
Experts agree that if the proposed February tariffs are implemented, we could see a repeat scenario. Higher materials costs would likely slow down construction projects, exacerbate the housing shortage and push homeownership further out of reach for many Americans.
“No question, tariffs will increase construction costs. Construction costs were already rising much faster than inflation in the year before Trump took office, so the tariffs are bad news,” Ghent says.
Labor Shortages: Fewer Workers, Slower Builds
Trump’s latest immigration crackdown could mean more than longer border wait times—it might hit homebuyers right where it hurts. With labor shortages already slowing down construction projects, stricter border policies could make it even harder to build new homes, driving prices higher and leaving buyers with fewer options.
Immigrants play a crucial role in the industry, with foreign-born workers far more likely to hold jobs in construction than their native-born counterparts.
In 2023, foreign-born workers were more likely than native-born workers to hold jobs in service (21.8% vs. 15%), construction (13.8% vs. 7.8%) and production-related occupations (15.2% vs. 11.8%), according to the Bureau of Labor Statistics. Among men, 22.7% of foreign-born workers were in construction compared to 14% of native-born men.
Overall, foreign-born workers accounted for 13.8% of jobs in these sectors, nearly double the rate of native-born workers.
“The industry is already struggling with a workforce shortage—there are nearly 500,000 open positions,” says George Carrillo, CEO of the Hispanic Construction Council. “Without enough workers, projects get delayed or canceled, and costs rise.”
Trump’s executive order, “Securing Our Borders,” aims to strengthen border barriers, increase detentions and reduce parole programs. While the administration argues these measures will protect American jobs, construction insiders warn that tightening immigration could worsen labor shortages, delay projects and further strain an already unaffordable housing market.
“Anything that discourages immigration, especially of non-college educated workers, will increase construction costs and decrease housing affordability,” Ghent says.
Job Market: Will New Policies Help or Hurt?
The job market remains healthy, with an unemployment rate of 4.1%. However, while nominal wages have increased, they haven’t kept pace with inflation. Over the past year, the consumer price index (CPI) rose by 2.9%, outpacing the 1% increase in inflation-adjusted hourly wages. This disparity, coupled with a slight reduction in average work hours, has resulted in a modest 0.7% rise in weekly earnings, according to the Bureau of Labor Statistics.
Trump’s economic policies could create new opportunities, but they may also bring challenges—especially for industries that rely on global supply chains.
Manufacturing, Energy and Trade: Will Trump’s Policies Deliver Jobs or Disrupt Industries?
Trump’s economic agenda is putting domestic production and energy independence front and center, with a series of executive orders aimed at boosting industries like oil, gas and manufacturing. His executive orders include:
- Declaring a national energy emergency, aiming to ramp up fossil fuel production.
- Directing agencies to reduce regulations on domestic production, including expanding Alaska’s oil, gas and mineral production by lifting restrictions, streamlining permits and increasing liquefied natural gas development.
While these moves may create jobs in some sectors, experts caution that the effects may not be evenly felt.
On the trade front, Trump’s proposed import tariffs on neighboring countries aim to reduce reliance on foreign supply chains and bring manufacturing jobs back to the U.S.
However, the impact of these tariffs remains uncertain. While they may encourage companies to shift operations to the U.S., they could also lead to more expensive production costs and potential job losses in industries that depend on international trade.
Crystal Stranger, CEO of tax advisory firm Optic Tax Inc., notes that the tariffs could have mixed effects on the job market. “The tariffs will certainly have a short-term effect of increasing jobs as some businesses shift manufacturing to U.S. facilities in order to circumvent tariffs by doing final assembly in the U.S.,” she said. Stranger added that many of these facilities could pop up in tax-friendly states like Texas and Nevada.
However, she warns that the broader impact might not be entirely positive.
“There also will be an increase in nearshoring to countries with low labor costs but on the lower end of the flat tariffs. And I haven’t seen anything yet that would prevent increases in the current shift of offshoring white-collar jobs for professional and customer support services,” Stranger said.
For job seekers, the evolving landscape presents both opportunities and uncertainties. Manufacturing and energy sectors could see a surge in demand, but long-term job stability and fair wages remain key concerns as companies weigh the costs of operating under new trade rules.
Related: Find a financial advisor.
How Will This Impact You?
Whether you’re a homebuyer, renter or worker, Trump’s policies could change the way you plan your financial future. Here’s what you should watch for:
For Homebuyers and Renters:
- Rising costs: Tariffs and labor shortages could push home prices upward.
- Look for incentives: Trump has floated potential tax breaks for first-time buyers—keep an eye out for these.
- Low interest rates: Shop around and compare mortgage lender fees to reduce costs.
For Workers:
- Job growth in manufacturing and energy: Keep an eye on opportunities in these sectors.
- Regional differences: Some areas may see more job creation than others, depending on industry focus.
- Upskilling matters: With changes to trade and production policies, adding skills in logistics, renewable energy or tech could keep you competitive.
Read More: Find the best mortgage lenders of 2025.
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