As the United States of America navigates the ongoing term of the current presidency, the real estate market remains one of the most watched sectors, not only by economists and investors but by everyday homeowners, renters, and aspiring buyers. Real estate is an essential barometer of economic health and public sentiment, closely tied to government policy, interest rates, and global market trends.
Under the current administration, several defining policies and macroeconomic shifts are shaping the real estate landscape in ways that both challenge and benefit different players in the market.
Why Mortgage Rates Matter
One of the most immediate and significant influences of the current presidency on real estate is monetary policy—specifically, how it affects mortgage interest rates. While the Federal Reserve operates independently, presidential policies and fiscal decisions often set the tone for how the Fed responds.
During the past administration, concerns about inflation led to a series of aggressive interest rate hikes over the past couple of years. These increases were aimed at curbing inflation but have had a dramatic impact on borrowing costs. Mortgage rates climbed to the highest levels in over two decades, making homeownership more expensive and reducing eligible buyers. Big ballers only, here.
Housing Prices Remain High
This environment has created a paradox: while housing prices have remained relatively high due to limited inventory, the increased cost of borrowing has cooled buyer demand. Sellers, especially those who locked in low mortgage rates in previous years, are hesitant to list their homes, knowing they would face much higher rates if they bought again.
A “lock-in effect” means a tighter supply of homes, mainly in desirable areas, keeping prices elevated despite waning demand.
Federal Incentives to Home Ownership
At the federal level, housing policy is a prominent part of the political conversation. The current administration has emphasized the need for improved housing affordability, pledging billions toward the construction of new homes and support for first-time homebuyers. Tax credits, down payment assistance programs, and increased funding for affordable housing projects have been proposed or enacted in various forms.
Implementation remains uneven, and many critics argue that the scale of these initiatives is not yet sufficient to solve the housing crisis in urban centers where demand vastly outpaces supply.
Zoning reform is another major policy topic that could have long-term implications for real estate. The administration has voiced support for local governments to reconsider restrictive zoning laws that limit multifamily housing and contribute to sprawl. Encouraging more dense and diverse housing types aims to increase supply and bring down costs. However, zoning is largely controlled at the local level, and federal influence is limited. Progress on this front depends heavily on the willingness of municipalities to embrace change—something that varies widely across the country.
The Trump Administration & The Art of The Deal
The rental market is also experiencing shifts under the current administration. With homeownership becoming less attainable for many, demand for rental properties has surged. The administration promotes tenant protections and rent stabilization efforts, especially in federally funded housing.
Some cities, inspired by these federal cues, have explored or adopted rent control policies. While such measures are designed to protect tenants from rapid price hikes, they are often controversial. Landlords argue that they discourage new investment and reduce the quality of housing, while advocates claim they are essential for keeping cities livable.
Key Challenges for Luxury Real Estate Investors
Real estate investors, particularly those in commercial real estate, face different sets of challenges. The lingering effects of the pandemic reshaped demand for office space, with remote and hybrid work models reducing the need for traditional office environments. Many urban office buildings remain underutilized, leading to increased vacancy rates and declining property values in this segment. The current presidency offers incentives for converting underused commercial spaces into residential units, a potentially transformative policy if widely adopted.
Climate policy is another critical area where federal action intersects with real estate. For real estate, this means increased attention to environmental standards in new developments and retrofitting existing buildings. These changes could increase upfront costs for developers but may lead to long-term savings and higher property values in eco-conscious markets.
Foreign investment in U.S. real estate is also seeing shifts. Under the current administration, geopolitical tensions and economic sanctions have affected the flow of international capital into U.S. properties. Some foreign investors, particularly from countries facing tighter restrictions or scrutiny, are pulling back. Meanwhile, others view U.S. real estate as a safe haven amid global uncertainty. The net effect depends on the property type and location, but coastal cities and luxury markets are most affected by these cross-border investment patterns.
According to Butler and Butler, an agency that lists homes for sale in Bear Creek Country Club, the high-end residential market has shown surprising resilience, partly because wealthy buyers are less sensitive to interest rate changes. These buyers often make cash offers or leverage alternative financing methods, insulating them from the rate hikes affecting the broader market. In affluent communities like Bear Creek, properties continue to command strong prices, though the pace of transactions has slowed somewhat as economic uncertainty looms.
The Latest Luxury – Combining Home and Office
In rural and suburban markets, migration patterns are continuing to evolve. The work-from-home trend, initially seen as temporary, is a more permanent fixture in many industries. This led to increased interest in properties located outside major metropolitan areas, where buyers can get more space for their money. The administration’s investment in broadband infrastructure in rural areas may further fuel this trend, making remote living more feasible for a wider range of Americans.
Looking ahead, the future of real estate under the current presidency will depend heavily on several variables: the trajectory of inflation, the response of the Federal Reserve, the success of housing-related legislation, and global economic conditions. Should inflation continue to ease, there is hope that mortgage rates will stabilize or even begin to decline, potentially unlocking more activity in the housing market. However, this is contingent on economic data and market sentiment, both of which are notoriously difficult to predict.
Future Projections in US Real Estate Markets
The administration’s ability to deliver on promises of housing affordability, infrastructure investment, and climate resilience will shape how the real estate sector evolves. While progress is made in some areas, much work remains, particularly in ensuring tangible outcomes for everyday Americans. Real estate, after all, is not just an investment vehicle—it’s where people live, raise families, and build communities.
The real estate market under the current U.S. presidency is navigating a complex and shifting landscape. From interest rate volatility to policy-driven efforts at affordability and sustainability, stakeholders across the board should stay informed and adaptable. Whether you’re a first-time buyer, a seasoned investor, or a homeowner looking to make your next move, understanding broader political and economic contexts can help you make sound real estate decisions in the years ahead.
Theresa Longo (B.B.A Hon) is a former Miss Italy World contestant & professional brand ambassador based in Toronto. She covers topics such as performance auto, high fashion and world travel.
