Trump promises to make housing affordable while upholding values ​​as he touts America’s ‘Golden Age’ in his State of the Union address

President Donald Trump reiterated his goal of making the housing market affordable without lowering home values ​​during the State of the Union address, his annual address to Congress.

Trump’s speech on Tuesday night, which lasted an hour and 47 minutes, focused on economic issues as the president tries to take steps to reassure voters that he has reined in the rising costs he has campaigned to fix.

Low interest rates will help ease the “Biden-created” housing affordability crisis, Trump said, while protecting the high home values ​​of those “who feel wealthy for the first time in their lives.”

“We want to uphold these values, we’re going to do both,” Trump said.

Trump said mortgage rates are “falling rapidly and payments have dropped by almost $5,000 since I took office.” The average mortgage rate was 7.04% in January 2025, when Trump took office, compared to 6.01% now, according to Freddie Mac.

What did Trump say about the ban on institutional investors?

Trump’s solution to the housing crisis includes a series of proposals to make it more feasible. He signed an executive order discouraging institutional investors from buying up single-family homes. He has also pushed for lower interest rates and ordered Fannie Mae and Freddie Mac to buy another $200 billion in mortgage bonds to lower mortgage rates.

In the speech, Trump asked Congress to pass legislation to make the ban permanent. That investor ban has not yet appeared in the bipartisan housing package, the Housing for the 21st Century Act, now in the Senate.

Trump added that “another pillar of the American dream that is under attack is home ownership.”

He said a Houston mother of two made a bid on 20 homes in the public gallery but lost to “giant investment companies that bypassed inspection, paid all the money and turned those homes into rentals, taking away her American dream.”

“Now I’m asking Congress to make that ban permanent, because homes are actually for people. That’s what we want, not homes for businesses,” he said.

At least 85% of Americans still believe that Homeownership is ‘essential to the American dream’ because it represents stability, upward mobility and the opportunity to build generational wealth, according to Shannon McGahnexecutive vice president and chief advocacy officer of the National Association of Realtors®, who cited a recent poll.

“The National Association of Realtors is grateful that the Administration and members of Congress are focused on addressing the nation’s housing affordability and supply challenges. We share the goal of increasing housing inventory at all price levels and advancing policies that strengthen communities, grow local economies, and create, rather than restrict, opportunity,” she said.

When it comes to banning institutional investors, the questions now revolve around scale, enforceability and spillover effects, he says Jake Krimmel, Realtor.com® senior economist.

“Large institutional investors in particular represent a relatively small portion of the national housing stock, and because their operations are often highly localized, it remains an open question whether banning new purchases would meaningfully shift markets at the metro level,” he explains.

Trump delivers an economic message focused on costs

The speech also comes days after the U.S. Supreme Court struck down most of the sweeping tariffs that Trump has made a centerpiece of his foreign and economic policy. These have had a major impact on a wide range of building materials.

Trump said he was not deterred by the “very unfortunate ruling.” He said the tariffs would “remain in force under fully approved and tested alternative legal statuses.” These tariffs, Trump hoped, would replace the income tax.

After Trump’s speech, the Associated builders and contractors Chairman and CEO Michael Bellaman said in a statement that the organization “appreciates the President’s continued focus on the economy, expanding opportunity for American workers and addressing affordability.”

He added that the construction industry employs more than 8.3 million people and contributes more than $2 trillion to the economy annually.

Trump indicated in his speech that there was momentum in the new construction sector.

“A little while ago we were a dead country; now we are the hottest country in the world, the hottest,” Trump said.

“As thousands of new businesses emerge and factories, factories and laboratories are built, we have created 70,000 new construction jobs in just a very short time.”

Bellaman said in his statement that “the construction industry, while resilient, faces continued headwinds due to high costs, rate uncertainty and a chronic labor shortage.

“As these concerns mount, the President should note that this industry is critical to meeting his promises to lower the costs of housing, infrastructure and energy for American families. ABC urges the President to create the conditions for contractors to thrive with pro-growth policies so he can deliver on his affordability promise for the American people.”

In his State of the Union address, Trump also announced a “taxpayer protection pledge” that would require data center developers to provide their own energy. Trump also said this would mean data center developers could build power plants on their sites. Trump said this would offset home energy costs.

In the Democratic response to Trump’s speech, the governor of Virginia said. Abigail Spanberger said Democrats were “working to lower costs,” but did not elaborate on the affordability issues Americans are currently struggling with.

However, Senate Democrats have unveiled several housing bills of their own aimed at reducing tax breaks and increasing housing construction.

Housing affordability is an important issue for lawmakers

McGahn, of the NAR, says that “unlocking existing inventory, streamlining regulatory barriers, encouraging new construction and supporting responsible development are all essential components of addressing housing affordability.

“That includes reforming outdated capital gains thresholds that haven’t been updated in decades and now discourage long-time homeowners from selling, reduce mobility and limit the number of homes available to new buyers,” she says.

She adds that NAR encourages the Senate to consider the Housing for the 21st Century Act.

Krimmel, the economist, says four years of high mortgage rates, on top of a long-standing housing shortage, have made the housing affordability crisis a central focus for national policymakers.

But the issue only featured briefly in the broader affordability discussion, with Trump citing falling rents, lower mortgage payments due to falling interest rates and job growth in the construction industry.

“According to Realtor.com data, rents are down 1.5% year over year and are about 4.8% below the August 2022 peak,” Krimmel said.

‘And this is evident from government data CPI relief has been declining since April 2023. Mortgage payments have also fallen over the past year, although our estimates suggest the typical annual savings on a median-priced home is closer to $3,000 than the quoted $5,000 figure.

“In terms of construction employment, overall construction jobs increased by approximately 44,000 over the past year, not 70,000 as stated. Looking more closely at the residential construction sector, residential construction employment has fallen by approximately 12,000 jobs since January 2025, which is consistent with slower activity in new home construction.”

Krimmel adds that while housing affordability has entered the national debate, policies that address the root cause are still awaiting a clearer legislative roadmap.

“A lasting improvement in affordability requires not only that the housing market gets moving again, but also that meaningful steps are taken to increase supply in the short term and expand sustainably in the long term.”