Bloomberg News reported on Tuesday that homebuilders are preparing a proposal to create nearly a million “Trump Homes” aimed at tackling the affordability crisis in the U.S.
Bloomberg News reported, citing sources familiar with the proposal, that this calls for builders to sell entry-level homes as part of a pathway-to-ownership program that allows for private capital funding in the billions of dollars.
Shares of U.S. homebuilders, including Lennar, D.R. Horton, Pultegroup, Toll Brothers, Taylor Morrison Home and KB Home, were up between 5-7% during early trading hours. Lennar opted not to comment, and the other homebuilders along with the White House did not promptly reply to Reuters’ requests for comments.
What ‘Trump Homes’ Could Mean for Potential Homebuyers & Housing Affordability
The proposal arrives at a time when U.S. consumers are still grappling with affordability issues in an inflationary macro environment, which is suppressing home sales nationwide.
With the estimate of 1 million homes, the program would probably provide housing valued at over approximately $250 billion. A White House official informed Bloomberg News that the administration is not actively contemplating the plan, however.
According to a report by Bloomberg News, implementing such a program would be complex, and it might not garner sufficient support to progress. The report further stated that in an effort to make housing more affordable, U.S. President Donald Trump signed an executive order last month that restricts large institutional investors from competing with individual homebuyers.
“Homes are built for people, not for corporations and America will not become a nation of renters, we’re not gonna do that,” Trump said at the World Economic Forum in Davos, Switzerland.
Nonetheless, that proposal has also met with some skepticism. Daryl Fairweather, who serves as Redfin’s Chief Economist, questions how effective it is.
“Even if you were to ban these really large investors, they would probably be replaced by smaller investors. It’s not necessarily going to open up inventory for first-time homebuyers,” said Daryl Fairweather, Chief Economist at Redfin.
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