We all know that ample and affordable housing has always been one of the keys that unlocks the door to success for home furnishings retailers.
From that perspective, it was encouraging to watch President Trump sign a fat stack of executive orders on his first day in office, including some that are likely to have a direct and indirect impact on the home builder’s segment.
In signing those orders, President Trump sent signals that he fully intends to come down hard on illegal immigration into the country, to impose stiff tariffs on Mexico and Canada, and he even signed one of those orders that targets the issue of housing shortages and high home prices.
Specifically, the order instructed the heads of all executive departments and agencies “to deliver emergency price relief, consistent with applicable law, to the American people. …”
Trump’s order will seek to do that by “… pursuing appropriate actions to: lower the cost of housing and expand housing supply. …”
The order goes on to say, “Moreover, many Americans are unable to purchase homes due to historically high prices, in part due to regulatory requirements at halon account for 25% of the cost of construction a new home, according to a recent analysis.”
Analysts say those figures were taken from a report from a University of Chicago economist whose work concludes that regulations from the Biden administration could over time add a total of some $47,000 in added costs per household.
Carl Harris, chairman of the National Association of Home Builders, was quick to respond and issued a statement applauding Trump’s plan.
“NAHB commends President Trump for acting on Day 1 to make housing a national priority by issuing an executive order that seeks to lower the cost and increase the supply of housing,” the statement reads. “President Trump understands that America is facing a housing affordability crisis and the only way out of this crisis is to remove barriers like unnecessary and costly regulations that are raising housing costs and preventing builders from building more attainable, affordable housing.”
While on first look, this appears promising for the home furnishings sector — and would certainly appear to offset challenges from Trump’s tariffs, one must wonder if ditching certain federal regulations will be the magic bullet to housing issues.
I applaud where President Trump is going when his order requires federal departments to “lower the cost of housing and expand housing supply” and “eliminate unnecessary administrative expenses and rent-seeking practices that increase health care costs.”
However, since my understanding is that new housing builds are often regulated on state and local levels, it will be interesting to see how much weight the White House may have on new house constructions.
For now, I guess if you believe it is better to light a candle than curse the darkness, President Trump’s order does cast light on the fact that home affordability is at a four-decade low.
Those renting as an option are also struggling. Statistics show that more than 21 million renter households spent more than 30% of their income on housing costs in 2023, representing nearly half (49.7%) of the 42.5 million renter households in the United States.
Home Sweet Home. No place like it.
If you can afford it. Stay tuned!
Honestly now. The builders of homes will not lower their prices one cent. The cost of everything never goes down it only keeps going through the roof!! And with tariffs now in place that will make it go up way more. The average American will not be able to buy furniture the way we would like them to. The wealthier Americans will continue to buy furniture but probably think twice which maybe they didn’t do before. I am not optimistic about how our furniture industry will be during 2025. I hope I’m wrong.