Administration explores emergency powers to address affordability crisis
US Treasury secretary Scott Bessent suggested Tuesday that President Trump is considering declaring a national housing emergency as soon as this fall, sparking speculation about what a new strategy to tackle the ongoing affordability crisis might look like.
The potential declaration could mark another use of emergency powers by Trump, who has already declared national emergencies at the southern border, for energy, and economic issues since taking office in January.
“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 told the Washington Examiner this week. “We may declare a national housing emergency in the fall.”
A national emergency declaration gives the president broad powers to redirect federal resources, waive certain regulations, and take actions without Congressional approval.
Past emergency declarations, for instance during the COVID-19 pandemic, have enabled mortgage forbearance, foreclosure moratoriums, and direct financial assistance.
It's not clear whether the Trump administration would attempt to help homeowners by halting foreclosures or pausing mortgage payments, although it seems more likely it would focus on moves to improve affordability for buyers.
That could see agencies like Fannie Mae and Freddie Mac directed to loosen underwriting requirements or offer streamlined loan modifications.
Declaring a national housing crisis might also allow the Trump administration to direct emergency funds toward affordable housing construction, infrastructure, or grants for local and state governments to stimulate building.
It could see regulatory requirements temporarily relaxed or expedited to speed up the construction of new homes, and incentives for builders introduced to turbocharge homebuilding.
Housing crisis reaches breaking point
The US housing market faces a severe affordability crisis driven by multiple factors. Home prices surged more than 40% between 2019 and 2022, according to the Harvard Joint Center for Housing Studies. This dramatic increase occurred during the pandemic homebuying surge when mortgage rates dropped to 2% to 3%.
Current conditions remain challenging for potential buyers. As of July, the median sale price for a typical US home reached $443,141, representing a 1.1% increase from the previous year, according to Redfin data. Relative to income, home affordability is near a 40-year low, and nearly half of renter households are cost burdened, spending more than 30% of their income on rent.
The housing shortage compounds these problems. The nation is short 4.7 million homes, according to the National Association of Realtors.
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