🏡 Make Housing Great Again

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Good morning. 🌞 In today’s newsletter, we're diving into actionable insights on how we can revitalize the housing market and make it great again. From new strategies to emerging trends, this edition is packed with the latest tips for thriving in the current real estate landscape.

Let’s get started and take housing to the next level! 🏡😎

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MAKE HOUSING GREAT AGAIN

The Historic Housing Boom: A 25-Year Outlook Fueled by Demographics, Demand, Policy Shifts, and a Near-Zero Crash Risk

Over the next 25 years, the United States is poised to experience a massive housing boom unlike any in its history, driven by demographic shifts, unprecedented demand from younger generations, and older generations offloading properties into a market strained by a shortage of 4–5 million homes. New single-family home construction, supercharged by cutting-edge technology, is set to become one of the most explosive growth sectors in the U.S. economy. Transformative policy changes under the Trump administration, including the release of Fannie Mae and Freddie Mac from conservatorship, will lower mortgage costs, unleash competitive products, and could drive mortgage rates down. Innovative housing plans—such as federal land development and tariff-driven manufacturing relocation—will amplify supply, while the market’s fundamentals make a housing crash a near-zero probability. This boom will also build generational wealth, redefining the American Dream. Here’s why it’s inevitable, why rates could drop, and why a crash is off the table.

Demographics and Demand: A Perfect Storm

The housing market is being squeezed by a demographic double whammy. Younger generations, particularly Millennials and Gen Z, are entering their prime homebuying years in record numbers. These cohorts, delayed by student debt and economic uncertainty in the 2010s, are now forming households and seeking homes at a pace that outstrips supply. Meanwhile, Baby Boomers, who own a significant share of the nation’s housing stock, are beginning to downsize or relocate as they age, flooding the market with existing homes. However, this influx won’t fully satisfy demand because of a critical shortfall: the U.S. is short 4–5 million homes, a gap built over a decade of underbuilding following the 2008 financial crisis.

This shortage amplifies demand pressure. For example, a young couple in Austin, Texas, might bid on a three-bedroom home listed by a retiring Boomer, only to find themselves competing with dozens of other buyers. The result? Escalating prices and a desperate need for new construction. Over the next 25 years, single-family homebuilding will surge to meet this gap, becoming a cornerstone of economic growth as builders race to deliver millions of new units.

Fannie Mae and Freddie Mac: Unleashing Affordable Mortgages and Lower Rates

A pivotal catalyst for this boom is the Trump administration’s plan to release Fannie Mae and Freddie Mac from conservatorship, a status they’ve held since 2008. Once freed, these government-sponsored enterprises (GSEs) will operate as fully private entities, driving down the cost of obtaining a mortgage, reducing monthly payments, and potentially lowering mortgage rates themselves. This shift will make homeownership more accessible, especially for first-time buyers priced out of the market.

Here’s why mortgage rates could drop post-release: Under conservatorship, Fannie Mae and Freddie Mac have operated with strict FHFA oversight, limiting risk-taking and competition. Their implicit government backing kept borrowing costs low, but it tethered their pricing to Treasury yields plus a modest spread (e.g., 1.5–2%). As private entities, they’ll retain capital market access but gain flexibility to streamline operations, cut overhead, and compete with banks and private lenders. This could compress the spread over Treasuries, lowering borrower rates. For example, if the 10-year Treasury yield is 4%, a privatized Fannie or Freddie might offer 5.5% mortgages instead of 6%, saving a borrower $150 monthly on a $300,000 loan. Private capital—pension funds or hedge funds—could flood the mortgage-backed securities (MBS) market, reducing yields and pushing rates down further. JPMorgan Chase estimates a 0.5–1% rate drop as the GSEs optimize their $5 trillion portfolios, a sentiment echoed in early 2025 X posts from housing analysts.

One significant change will be the elimination or substantial reduction of private mortgage insurance (PMI). PMI, typically required for buyers with less than 20% down payment, adds $100–$300 to monthly payments on a $300,000 loan. For a family in Ohio purchasing a $250,000 home with a 10% down payment, eliminating PMI could save them $150 monthly—$1,800 annually—making the difference between renting and owning. Freed from conservatorship, Fannie and Freddie could assume more risk on low-down-payment loans, reducing PMI reliance.

Moreover, the release will force innovation. As private entities, they’ll offer diverse mortgage products—flexible terms, lower rates, or options for gig workers and self-employed buyers. Competition from players like JPMorgan Chase, eager to challenge the GSEs, will intensify this dynamic. A 30-year fixed-rate mortgage might drop from 6.5% to 5.5%, shaving hundreds off monthly payments and spurring demand.

Trump’s Housing Vision: Federal Land, Tariffs, and New Boom Towns

Leaked details of the Trump administration’s housing plans reveal a bold strategy to boost supply. One key proposal is opening federal land for development. The federal government controls about 28% of U.S. land, much of it in the West, currently off-limits to private builders. Easing restrictions could turn millions of acres into new subdivisions. In Nevada, federal land near Las Vegas could host thousands of single-family homes, easing pressure on a metro area where inventory is razor-thin.

Another plank involves tariffs on foreign goods, incentivizing manufacturing relocation to the U.S. During Trump’s first term, companies like Taiwan Semiconductor Manufacturing Company (TSMC) announced a $12 billion factory in Arizona to avoid tariff costs. In 2025, X posts report TSMC is now investing $100 billion in five new chip plants in Arizona, creating 20,000–25,000 jobs. Nissan is eyeing a shift from Mexico to the U.S., while Eli Lilly and Clarios are pouring billions into Ohio and Indiana facilities. These factories bring jobs, attracting workers who need homes—creating a virtuous cycle of housing demand. In South Carolina, BMW’s tariff-driven expansion in the 2010s spurred a 20% increase in nearby home construction, a preview of what’s to come nationwide.

These manufacturing hubs will spawn new boom towns, driving housing growth in specific regions. In Arizona, towns like Buckeye and Maricopa, near TSMC’s expanding Phoenix-area operations, are poised to explode as workers flood in. Ohio’s Marysville and Wilmington could become manufacturing-driven boom towns, fueled by Eli Lilly’s pharmaceutical plants and Clarios’ battery production. In Indiana, Kokomo and Lafayette are set to benefit from automotive and industrial investments. South Carolina’s Greer and Spartanburg, already industrial hubs, will see renewed growth from tariff-shielded firms. The housing boom will be felt most acutely in these states—Arizona, Ohio, Indiana, and South Carolina—where job creation and federal land availability align with tariff incentives. Texas, with its business-friendly climate and vast land, could also see secondary hubs like Georgetown or San Marcos thrive as companies like Samsung expand U.S. operations. These states will benefit most, with builders rushing to meet demand from new residents, amplifying construction and economic activity.

Economic Impact: Construction as a Growth Engine, Turbocharged by Technology

New single-family home construction will be a titan of economic growth over the next 25 years, amplified by technological innovation. Building 4–5 million homes requires labor, materials, and infrastructure—think carpenters in Colorado, steel from Pennsylvania, and roads in Florida. Each home built generates roughly 3 jobs and $150,000 in economic activity, per industry estimates. Multiply that by millions, and the sector could add trillions to GDP, rivaling tech or healthcare in impact.

Technology will accelerate this surge. Modular and prefabricated homes, which cut construction time by 20–50% and costs by 10–20% (McKinsey & Company, 2023), are gaining traction. Companies like ICON are 3D-printing homes in Texas for as low as $200,000, while AI and robotics streamline permitting and address labor shortages. In California, a 2024 3D-printed neighborhood slashed build times from 6 months to 6 weeks, meeting demand faster than traditional methods. Cities like Charlotte or Boise, already seeing builder activity spike, will become blueprints for a tech-driven national boom.

Why There Will Be No Housing Crash: A Near-Zero Probability

Unlike the 2008 housing crisis, today’s market is fortified against a crash. First, 40% of U.S. homes—approximately 56 million out of 140 million units—are mortgage-free, per X posts and 2023–2025 industry sentiment. This high outright ownership, driven by low rates over the past decade, means nearly half of homeowners face no foreclosure risk, even in a downturn. In 2008, loose lending left many over-leveraged; today’s equity-rich owners are a bulwark.

Second, for the 60% of homes with mortgages—around 84 million units—the average interest rate is low. X posts and Freddie Mac data suggest 80% of mortgage holders have rates below 5%, many below 4% from the 2010s and early 2020s refinancing boom. As of March 2025, Freddie Mac’s survey pegs the 30-year fixed rate at 6.5%, meaning most homeowners won’t sell and upgrade to a higher rate. A homeowner with a $300,000 mortgage at 3.5% pays $1,347 monthly, versus $1,896 at 6.5%—a $549 gap. This “rate lock” stabilizes supply, preventing distressed sales.

Third, homeowner equity is at historic highs. The Federal Reserve reports U.S. home equity hit $32 trillion in 2024, up from $16 trillion pre-2008. With prices up 50% since 2012 (S&P CoreLogic Case-Shiller Index), a 10–15% correction wouldn’t push most owners underwater. Only 2–3% of homes are underwater today (CoreLogic), versus 26% in 2008. The 2008 crash stemmed from subprime loans and overbuilding—conditions absent now, with stricter lending and a supply shortage ensuring demand outpaces dips.

CONCLUSION

A New American Dream, Crash-Proof and Wealth-Building

The convergence of demographics, a 4–5 million home shortage, and Trump’s policies sets the stage for a 25-year housing boom. Younger generations will buy as older ones sell, fueled by a construction surge aided by 3D printing and modular homes. With Fannie Mae and Freddie Mac freed, mortgage rates could drop—perhaps to 4.5%—as competition and efficiency kick in, while PMI fades and products diversify. Federal land and tariffs will boost supply, from tech-built homes to factory-adjacent subdivisions. With 40% of homes mortgage-free, 80% of mortgages below 5%, and equity soaring, a crash is near zero.

This boom also supercharges wealth for Millennials and Gen Z, far outpacing the financial treadmill of renting. A $300,000 home bought in 2026 with a 5% down payment could appreciate to $500,000 by 2040, building $215,000 in equity (after accounting for the initial $15,000 down). Over 14 years, the owner’s monthly payment—say $1,500 at 4.5%—pays down the loan while rents climb from $1,500 to $2,500 with 3% annual increases. The renter saves nothing, while the owner gains a $215,000 asset to fund businesses, education, or retirement. Over 25 years, this wealth effect could lift millions, narrowing the gap with Boomers who rode past booms.

As newly confirmed FHFA Director Bill Pulte declared on X on March 13, 2025, “Make Housing Great Again”—this isn’t just a boom, it’s a reimagining of the American Dream, brick by tech-savvy brick, built to last and lift generations.

AND THAT'S A WRAP!

Stay updated,

—Tim & Julie Harris
Harris Real Estate Daily

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