Republicans are now officially projected to win control of the U.S. House of Representatives, clearing the path for President-elect Donald Trump to pursue his full policy agenda, including his proposals affecting housing.
On Wednesday night, the Associated Press issued its projection for the final House race needed to achieve a Republican majority of 218 seats, declaring incumbent GOP Rep. Juan Ciscomani the winner in Arizona's Sixth Congressional District. There are still nine House races that remain too close to call, which will determine the ultimate margin of the GOP's majority in the chamber.
House GOP members met on Wednesday to elect leadership and were expected to stick with House Speaker Mike Johnson to hold the gavel when the newly elected Congress convenes in January.
Trump, who ultimately swept all seven closely contested swing states to win the presidential election last week, will now have free rein to execute his agenda, with support from Republican majorities in both chambers of Congress and a Supreme Court stacked with a supermajority of conservative justices.
It all means that the ball is in Trump's court to solve the housing affordability crisis, with little chance to blame obstruction from Democrats if he fails to deliver.
On the campaign trail, Trump promised to slash prices for newly built homes by as much as half, while delivering mortgage rates under 3%. Mortgage rates are currently averaging 6.79% after rising for six consecutive weeks, according to Freddie Mac.
"We will eliminate regulations that drive up housing costs with the goal of cutting the cost of a new home in half. We think we can do that," Trump said in September in remarks at the Economic Club of New York.
"Reducing mortgage rates is a big factor. We're going to get them back down to, we think, 3%, maybe even lower than that, saving the average homebuyer thousands of dollars per year," he said.
Presidents historically have no direct control over mortgage rates, which move in tandem with long-term bond yields in response to investor expectations about inflation and the economy. A thriving economy tends to push mortgage rates higher, while recessions drive them lower.
In addition to cutting regulations on homebuilders, Trump has also proposed opening up portions of federal land for home construction to boost the housing supply. Economists generally agree that a dearth of supply is the main reason housing affordability is near record lows, and Trump's ideas to stimulate construction could help address that issue.
On the other hand, industry experts warn that Trump's signature policies of high tariffs and mass deportations of unauthorized immigrants could boost construction costs for new homes.
The construction industry relies heavily on immigrant labor, with undocumented immigrants making up an estimated 15% of the national construction labor force. Removing them from the country could spike labor costs and cause construction delays, economists have warned.
As well, nearly 10% of residential construction materials are imported, making them potentially more costly for homebuyers under new tariffs on foreign goods.
In a statement on Tuesday anticipating the Republican sweep of the White House and Congress, the National Low Income Housing Coalition predicted that GOP control would have "significant implications for affordable housing and homelessness policy," including funding for Department of Housing and Urban Development rental and homelessness assistance programs.
"During his previous administration, President Trump repeatedly called for massive cuts to HUD programs, including Housing Choice Vouchers, and eliminated some affordable housing development programs like the National Housing Trust Fund and the HOME Investments Partnership Program," the group said.