U.S. Treasury Secretary Scott Bessent told Reuters on Monday that the Trump administration plans to tackle the high cost of housing in the upcoming weeks. Bessent described it as an “all hands on deck” situation as he emphasized on its urgency.
The housing market has been hit especially hard by the U.S. central bank’s tight monetary policy stance and high housing costs are a top concern for many Americans. Bessent stated that rents were now dropping, and he expected an increase in real estate transactions and home sales once interest rates began falling. This could encourage people who were locked into low mortgages to put their existing homes on the market.
Bessent also said that the Trump administration was exploring ways to simplify permitting and encourage standardization to boost construction. This would potentially boost the housing supply and bring high costs down.
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In a separate interview, Bessent told The Washington Examiner that Trump may declare a national housing emergency this fall. “We’re trying to figure out what we can do, and we don’t want to step into the business of states, counties, and municipal governments,” Bessent said. “I think everything is on the table.”
Under the 1976 National Emergencies Act, the President can declare a national emergency at his discretion. Declaring a national emergency allows the President to bypass the Congress to take a range of actions limited to the 137 emergency powers defined by law, as well as an additional 13 statutory powers if Congress declares a national emergency. So far in his second term, Trump declared nine national emergencies, which mostly touched on immigration and trade. Trump has used his emergency powers to impose sweeping tariffs on much of the world, as well as to give the military oversight over immigration enforcement. This broad use of executive emergencies has been criticized as executive overreach.
The U.S. has been facing a housing crisis for the past two decades. This has persisted because of a shortage in housing supply, and it accelerated during the 2008 financial crisis. Some estimates suggest that the U.S. is short around 4 million homes, while housing deficits are worst in Greater New York and Los Angeles. The crisis became worse after the COVID-19 pandemic, which pushed up rental prices and was followed by an increase in interest rates to counter inflation.
The pandemic also led to a rise in the cost to build, because of labor shortages and supply-chain disruptions. The monthly payment on the median-priced home across the U.S. went up 59% between 2020 and 2023. Some experts believe climate change has exacerbated the problem as many homes are underinsured for natural disasters, which are increasing in frequency. Others also claim the housing crisis has been worsened by that growth of institutional investors buying homes for rental.