Trump Administration Signals Aggressive Housing Reform for 2026
Min 1: Portable Mortgages Could Unlock 1.72 Million Annual Sales
The administration floated two big ideas: 50-year mortgages and portable mortgages that let homeowners transfer existing low rates to new properties. Portable mortgages address the lock-in effect where 58% of mortgages sit below 4% rates, preventing 1.72 million annual sales according to industry estimates. Fifty-year terms would reduce monthly payments approximately 15% compared to traditional 30-year loans at the same rate, improving affordability ratios for marginal buyers—though critics argue extended terms increase total interest paid dramatically while doing nothing to address the fundamental supply shortage. A lender who offers portable mortgage products captures refinancing business from homeowners who otherwise stay locked in place, charging 1.5% origination fees on $400,000 mortgages for $6,000 revenue per transaction—facilitating mobility for just 200,000 annually of the 1.72 million locked-in homeowners creates $1.2 billion in origination fees while unlocking inventory.
Min 2: Income Growth Will Outpace Home Prices for First Time Since 2022
Realtor.com Chief Economist Danielle Hale expects homebuyers will soon devote 29.3% of monthly paychecks to the median priced home—the first time below the 30% threshold since 2022 if income growth continues. Redfin predicts mortgage rates in the low 6% range for 2026, down from the 2025 average of 6.6%, with median home sales prices increasing just 1% while wage growth stays steady at 4%. Compass Chief Economist Mike Simonsen expects existing home sales in the 4.25 million range next year, still well below pre-pandemic levels but representing improvement from current depressed volumes, with home prices increasing less than 1% and inventory jumping 10% as delisted shadow inventory returns to market.
Min 3: Florida, Texas, California Prices Declined from Peaks
States like Florida, Texas, and California saw average home prices decline in 2025 from their peaks, though Simonsen doesn't expect sharp nationwide drops in 2026—prices will more likely hover near current levels with a forecast half percent increase, essentially flat. Cotality confirmed 32 metros posted year-over-year price declines by October 2025 compared to just six metros at the start of the year, with Miami and St Petersburg leading the slowdown at six percentage point declines from prior year peaks. A buyer who waited through the 2024 bubble peak now purchases homes in Phoenix and Austin at 20% to 25% discounts from 2022 highs, acquiring properties at $350,000 in markets where replacement costs exceed $425,000—creating immediate equity cushion while rental income covers carrying costs during the holding period as construction pipelines empty and inventory normalizes through 2026 and 2027.
Min 4: Shadow Inventory of 150,000 Delisted Homes Returns
Many sellers stayed unwilling to give up ultra-low mortgage rates they locked in years ago, but as homeowners adjust to rates above 6%, more will decide to sell in 2026 adding inventory and easing price pressure. Shadow inventory of 150,000 delisted homes nationally creates pent-up supply that returns as sellers capitulate to the new pricing reality. Redfin confirmed 54.5% of November listings sat on market at least 60 days without contracts—the highest share for any November since 2019, with Miami at 63.8% and Austin at 62.4%. Wholesalers who target these delisted properties negotiate directly with frustrated sellers willing to accept 8% to 12% below current market comps to avoid continued carrying costs, assigning contracts to cash buyers or rental portfolio operators for $8,000 to $15,000 assignment fees per transaction—processing 100 deals annually creates $1 million in fee income.
Min 5: Long-Term Solution Requires Building 4 to 7 Million Homes
Even with modest affordability improvements, many buyers will still feel priced out in 2026. The best way to make homes affordable long term is building more homes according to economists—the national shortage estimated between 4 million and 7 million homes traces to the decade following the Great Recession when the U.S. constructed fewer new homes than any decade since the 1960s. The House Financial Services Committee passed the Housing for 21st Century Act advancing priorities including streamlined approvals and increased local flexibility to boost production. Publicly traded builders are expected to increase closings modestly in 2026 after a 4% decline in 2025, positioning operators who preserved balance sheets and accumulated land banks during distress for outsized returns as pent-up demand meets constrained supply over a multi-year horizon.
The Takeaway
The Trump administration confirmed homeownership as a top priority with portable mortgage proposals that could unlock 1.72 million annual sales where 58% of mortgages sit below 4% rates, though policy analysts suggest limits on presidential action without legislative support. Realtor.com economist Hale expects homebuyers will devote 29.3% of income to housing for the first time below 30% since 2022 as 4% wage growth outpaces 1% home price increases forecasted for 2026. Florida, Texas, and California saw prices decline from peaks with 32 metros posting year-over-year declines by October, creating regional arbitrage as Phoenix and Austin trade 20% to 25% below 2022 highs. Shadow inventory of 150,000 delisted homes returns as sellers adjust to rates above 6% with 54.5% of November listings exceeding 60 days, creating wholesaling opportunities at 8% to 12% discounts generating $1 million in annual fee income. The long-term solution requires building 4 to 7 million homes to address the shortage tracing to post-Great Recession underproduction, positioning disciplined homebuilders for outsized returns as the House advances legislation streamlining approvals into a sustained multi-year recovery.
