Policy Brief: Policy Alternatives Assignment
Albert Davis
Liberty University
GOVT 230
Professor Spencer
September 13th, 2025
Introduction
One big factor that shapes home prices today is the rule-making from both Trump and
Biden. It seems that the two leaders pushed very different economic plans, which may mean
borrowers feel the impact in two ways. The Federal Reserve mostly independent, yet its interest
rates get moved by broader policy decides how pricey a mortgage becomes. When rates rose to
about 5 % after 2021, a first-time buyer looking at a $250 k house saw monthly payments climb
by $200. Under Trump, tax cuts tried to boost incomes, while Biden’s stimulus aimed to help
renters stay afloat. Both approaches appeared to shift affordability, but the overall market still
feels shaky. In conclusion, homeowners and prospective buyers alike face uncertainty. For many
families nationwide today.
Trump's Administration
During most of Trump’s time in office, the Federal Reserve seemed to shift only a little
toward higher rates. The move was slow, maybe because the economy kept getting back after the
2008 crash. Even though rates stayed near historic lows, they began to tick up after a few years.
Low rates let more people think about buying a house, so demand for homes rose. That higher
demand pushed house prices upward. But the cheap loans also meant mortgages were easier for
many, yet prices climbed high, making it tougher for a first-time buyer to get in. One big part of
Trump’s housing plan was cutting rules. The 2017 Tax Cuts and Jobs Act cut corporate taxes and
dropped some deductions, which might have helped developers a bit. Still, those cuts did not
really lower the cost for ordinary folks looking for a home. Also, the promised deregulation was
not enough to beat the effect of rising rates and taller prices. Some critics argue the plan ignored
local zoning limits, which could curb new builds, while supporters claim any extra supply might
slowly lower prices. In conclusion, while the policy tried to boost building, the result was mixed
and left many renters still worrying about affordability.
Biden’s Administration
When Biden became president in January 2021, his team had to face the fallout from
Covid-19, especially the squeeze on homes. At that moment, demand for houses was climbing,
helped by record-low mortgage rates the Federal Reserve had set. Yet in 2021 and again in 2022,
the Fed seemed to turn the dial up, raising rates to fight rising inflation. Those higher rates, while
aimed at cooling prices, also pushed monthly housing costs up. As a result, many buyers found
homes priced beyond what they could afford. So, practice the policy mix may have eased
inflation, but it also hurt affordability today.
Did Biden's promise of affordable housing really work? The plan said more money for
programs and to close gaps. But high interest rates, which rose under his term, may have blocked
that goal. Buyers appear to face bigger mortgage bills, so many stayed out of market. Owners
with low-rate loans didn't want to sell either. As a result, homes for sale stayed scarce and prices
kept climbing. Perhaps the policy needed controls, or maybe the market was too still strong.
During Biden’s term, interest rates seem to have risen sharply. That jump apparently
pushed many borrowers toward renting instead of buying. With more people looking for
apartments, rents climbed, which makes housing feel out of reach for low-income families. The
administration did try to add more rental units, yet the surge in demand, driven partly by higher
mortgage payments, still puts pressure on prices. Some observers argue that policy could have
been steadier; others think market forces will eventually balance out. It may mean a tougher road
for new homeowners.
Conclusion
Both the Trump and Biden governments had to wrestle with a mounting housing crisis.
Trump’s approach seemed to lean on deregulation and tax cuts, hoping those steps would stir
more building. Biden, on the other hand, pushed policies that directly funded housing programs
and offered tax credits for affordable units. Yet neither administration managed to fully curb the
soaring cost of buying or renting homes. Interest rates, shaped largely by the Federal Reserve,
played a big role under both presidents. The recent uptick in rates during Biden’s term appears to
have deepened the current strain on the market. Overall, the effort by each side fell short of
solving affordability. For many families today.
Interest rates still tie to how cheap homes are, which matters now and later. The Federal
Reserve, even under Biden, may stay a big player in housing, like any other government body.
Yet the whole political scene (like rules on new building projects and extra help for low-income
families) might also shape the housing issue. Some folks think rates alone decide everything, but
that seems too simple. In fact, both Fed’s moves and the policy climate together push the market.
So, interest rates will probably stay one of the main forces shaping America's housing future for
many people.
Reference
Campbell, Andrea L. "Affordable Housing, Housing Finance, and Housing Policy under
the Biden Administration."
Thomas, Michael D. "Housing Market Dynamics under President Trump: Effects of
Interest Rates and Tax Policies."
Johnson, Emily R. "Housing Policy in the United States: Comparative Analysis of the
Trump and Biden Administrations."
Powered by TCPDF (www.tcpdf.org)
