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In honor of National Homeownership Month, which begins today, President Donald Trump has committed to helping hard-working Americans become homeowners. This year’s theme is “Find Your Place in a New Era of Homeownership.”
The president pledged to strengthen the middle class by reducing rules and regulations, cutting taxes, and ending unnecessary government spending.
“For generations of Americans, owning a home has been an essential element in achieving the American Dream,” Trump wrote in a proclamation. “Homeownership is often the foundation of security and prosperity for families and communities and an enduring symbol of American freedom.
“These policies will unshackle our economy and create and sustain high-paying jobs so that more Americans have the resources and freedom they deserve to fulfill their American Dream,” Trump wrote.
The president also highlighted the challenges that many young families and minorities are facing as they struggle to save up for a down payment, face regulatory hurdles, and strive for access to credit.
Fewer than two-thirds of Americans, about 63.6%, were homeowners in the first quarter of 2017, according to the most recent U.S. Census Bureau data. That’s down from 69.1% at the height of the market in 2005, before the housing crash.
U.S. Housing and Urban Development Secretary Ben Carson opened the month by hosting a forum on the state of homeownership in America. The talk addressed the challenges many millennials are encountering when they seek to become homeowners.
“We recognize the abiding value of owning a home, and rededicate ourselves toward ensuring that every hardworking and credit-worthy American enjoys a fair chance at becoming a homeowner,” Carson said in a statement.
But some housing experts are not convinced that Trump’s policies will result in increased homeownership.
“It’s a horror show,” says Alex Schwartz, an urban policy professor at the New School in New York City and author of the book “Housing Policy in the United States.” “None of these proposals are going to strengthen the middle class. If anything, they will weaken it. In particular, his health care reforms will greatly increase the financial burdens for many middle-class people.”
Ken Johnson, a real estate economist at Florida Atlantic University, in Boca Raton, FL, says he’s seen nothing in Trump’s proposed budget that will directly lead to more Americans being able to buy homes.
Housing experts pointed to Trump’s proposal to double the standard deduction that taxpayers can use to lower their tax burden. This deeply diminishes the value of the mortgage interest deduction provided to help homeowners defray costs, and may discourage people from buying homes.
The National Association of Realtors® and the National Association of Home Builders both expressed concern in April, when the tax proposal was released, about the impact that increasing the standard deduction might have on the housing market.
“The larger standard deduction should noticeably minimize the demand for homeownership,” Johnson says.
But most people don’t buy a home to save money on their taxes, says Ted Jones, chief economist of the Stewart Title Guaranty Co., a Houston-based residential and commercial property insurance underwriter.
“Particularly for the middle class, [a home] becomes their largest store of wealth,” Jones says. “I don’t know if [raising the standard deduction] will make that big of a difference.”
He’s optimistic about Trump’s chances of improving the economy—and therefore helping more Americans be able to afford to buy.
“What he’s done to roll back some regulations, particularly around small businesses, is very positive,” Jones says. “If you can allow small businesses to create more jobs, you’ll create more demand for housing and you’ll sell more homes.”
National Homeownership Month began as a week of festivities in 1995, according to Freddie Mac. President George W. Bush upgraded it to a full month in 2002.
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