Trump Admits Keeping Homeowners ‘Wealthy and Happy’ May Conflict With Improving Affordability

President Donald Trump has acknowledged there is a "conflict" between his vow to improve affordability for homebuyers and his desire for homeowners to retain their record-high levels of equity.

Speaking in the Oval Office on Dec. 18 after signing an executive order easing federal restrictions on marijuana, Trump said he wants to prevent home values from falling for existing homeowners, particularly older Americans.

"I don't want to knock those numbers down, because I want them to continue to have a big value for their house. At the same time, I want to make it possible for young people out there and other people to buy housing. In a way, they're at conflict," said Trump.

"In other words, you create a lot of housing all of a sudden, and it drives the housing prices down. So I want to take care of the people that have houses that have a value to their house that they never thought possible, that have sort of made them wealthy and happy, and especially in their later years. Got to be careful with that. I want to keep them up. At the same time, I want to make it possible for people to go buy houses," he continued.

The remarks highlight a dilemma for Trump as he pivots his domestic agenda to focus on affordability, which is expected to be a key issue as his Republican Party seeks to maintain control of Congress in the 2026 midterm elections.

Trump has repeatedly vowed to bring down housing costs and expand homeownership to millions more families. But if home prices decline outright, then he risks alienating homeowners, who are typically older and more conservative than renters.

"For homes to become more affordable to first-time buyers, they must become less valuable to their owners," says Realtor.com® senior economist Joel Berner. "This is basic economics and there's not much getting around it."

Berner notes that because new and existing homes are essentially interchangeable, increasing the supply of new homes relative to demand should decrease prices for both new and existing homes.

"Building more new homes would attract buyers away from the existing inventory and lower the prices of those existing homes," he says. "You can't really have it both ways when it comes to supply and demand for homes."

This dilemma may explain why Trump has focused almost entirely on lowering mortgage rates as a solution to the housing crisis, since lower mortgage rates benefit both prospective and current homeowners.

However, presidents have no control over mortgages rates, and even the Federal Reserve can influence them only loosely and indirectly, with investors and the free market ultimately setting long-term lending rates.

Trump has proposed workarounds, such as his brief flirtation with the idea of 50-year mortgages last month. But his administration appears to have dropped that plan after intense backlash from within the conservative base.

Even if mortgage rates were to plunge, it would be difficult to solve the affordability crisis with lower rates alone. At current home prices, even if rates dropped to an impossibly low 1%, the typical mortgage payment would still be higher than it was in 2019.

Rising wages can also make a dent, but with current trends in wage growth, it will take another 11 years to restore the housing market to pre-pandemic affordability levels, according to a recent estimate from John Burns Research and Consulting.

Meanwhile, homeowners are sitting on an all-time high of $35.8 trillion in aggregate equity, an amount that is up 72% over the last five years. Rising home values, expanded housing stock, and greater average ownership stakes have all contributed to the gains.

A sharp pullback in home values could damage the broader economy, if consumers pull back on spending due to their perceived loss of wealth. Falling home prices could also hurt the construction industry, a key source of jobs, with ripple effects in the broader labor market.

So, it makes sense that Trump seems fixated on lower mortgage rates, promising in a special address to the nation on Dec. 17 that "mortgage payments will be coming down even further early in the new year."

"You will see this in the new year, I will announce some of the most aggressive housing reform plans in American history," he said, without offering further details.

Trump also plans to announce his nominee for the next Federal Reserve chair in early 2026, several months before current Fed Chair Jerome Powell's term expires in May.

Meanwhile, the Realtor.com economic research team projects modest improvements in home affordability in 2026, but is not forecasting dramatic shifts in the market.

The forecast projects that wages will rise slightly faster than home prices next year, and that mortgage rates will average around 6.3%, lower than they have been for most of 2025.