Since Donald Trump returned to the White House in January 2025, his administration has rapidly implemented measures that have impacted various sectors. Between aggressive tariff policies and a likely tightening of labor conditions for immigrants, uncertainty in the markets has intensified. Despite this, the general sentiment among business leaders is that his administration will pursue a "pro-business" approach. But what does all this mean for the U.S. housing market?

Regulations, housing market and structural challenges

The administration has stated its intention to reduce regulations in several industries, including the real estate sector. Reforms in zoning regulations, building permits, and environmental regulations could streamline the development of new residential and commercial projects. However, other factors could offset these benefits.

Tighter immigration policies could affect the availability of construction labor, which would raise wage costs and delay projects. Added to this is the impact of tariff policies on imported construction materials, which could make inputs significantly more expensive and, consequently, increase the final prices of housing and commercial properties.

In addition, recent interruptions in the funding of federal affordable housing programs have raised concerns in the sector. Many projects depend on these funds, and delays in their availability could slow down the development of initiatives aimed at reducing the housing deficit.

While deregulation could facilitate new investments, the combined impact of labor restrictions, rising costs and possible changes in housing subsidies pose a complex scenario for the real estate sector in the coming years.

Tax policies and possible modifications

Some key provisions of the 2017 tax reform that benefit the real estate sector are close to expiring. These include accelerated depreciation and the business income deduction. The current administration has stated its intention to extend these benefits, but their continuation will depend on budget constraints and the legislative process. This uncertainty could affect the financial planning of investors and developers, who must evaluate the potential impact of eventual regulatory changes.

Inflation and interest rates in the economic outlook

New trade policies, particularly the increase in tariffs, could generate inflationary pressures by increasing the cost of goods and services. In this context, the Federal Reserve could adopt a more cautious approach to future interest rate cuts. Although some analysts expect gradual cuts, long-term interest rates could remain at high levels, making it more expensive to finance new real estate projects and affecting the profitability of investments in the sector.

Long-term outlook

While political decisions can generate short-term fluctuations, the real estate market responds primarily to structural trends such as population growth, interest rates, and economic cycles. For investors and developers, it is essential to focus their strategies on these factors, without losing sight of possible regulatory and fiscal changes that could affect their investment decisions.

Marco Aurelio Arellano
Real Estate Analyst Fynsa AGF