How Trump's Policy Shift Is Easing Home Prices

Deportations, Deregulation, Disinflation

Team,

This is my new piece on the easing of home prices and mortgage rates that President Trump’s policies are delivering. You can also read it HERE in RealClearMarkets.

One major element of relief for American renters and homebuyers is the Trump Administration’s mass deportations of illegal aliens.

The Council of Economic Advisers estimates that rents increase roughly one percent for every one million additional illegal immigrants entering affected housing markets. With an estimated 20 million illegal entrants during the Biden years, that implies roughly a 20 percent national rent effect — with even greater pressure in sanctuary and border metros where inflows concentrated.

Now the Trump affordability correction has begun under a hat trick of policies: deportations, deregulation, and disinflation.

Would love to have your comments, and please send this to a friend.

Peter

Rent Check Test: How Trump’s Policy Shift Is Easing Home Prices

By Peter Navarro

February 19, 2026

This week’s residential construction report — with housing starts beating expectations and single-family starts rising again — signals that Trump’s policy shift is beginning to unwind the housing distortions of the Biden era.

Housing inflation was one of the clearest affordability failures of those Biden years.

For working families, rent or mortgage payments are not discretionary expenses — they are the single largest component of consumer spending. When housing costs surge, everything else feels expensive.

You cannot import millions of illegal aliens into tight urban rental markets, as the Biden administration did, without upward price effects. You cannot run inflationary fiscal and monetary policies without pushing mortgage rates higher. And you cannot over-regulate housing supply into paralysis and expect affordability.

When millions of additional renters enter dense urban markets in a compressed time frame, rents rise. The Council of Economic Advisers estimates that rents increase roughly one percent for every one million additional illegal immigrants entering affected housing markets. With an estimated 20 million illegal entrants during the Biden administration, that implies roughly a 20 percent national rent effect — with even greater pressure in sanctuary and border metros where inflows concentrated.

That is not politics. That is arithmetic.

Now the Trump affordability correction has begun under a hat trick of policies: deportations, deregulation, and disinflation.

With stepped-up deportations — both removals and voluntary departures — marginal rental demand is easing first in the same metros that absorbed the surge. When demand cools in high-density rental markets, vacancy rises. When vacancy rises, concessions follow. When concessions spread, effective rents soften.

Among the biggest sanctuary cities, Los Angeles rents have moved sharply lower, pushing the market to a four-year low. Rent growth in New York City has cooled noticeably, with pricing momentum flattening and landlord concessions reappearing after years of relentless upward pressure tied to migrant inflows. Chicago, another major intake hub, shows a similar pattern: stabilization replacing surge.

And this is not limited to a handful of blue strongholds. Since President Trump took office, cities across America — including Austin, Phoenix, Denver, Las Vegas, and Nashville — are showing measurable rent declines as vacancy rises and concessions expand.

Deportations are only part of the affordability reset.

Under Biden and Fed Chair Jay Powell, high mortgage rates created a lock-in effect. Homeowners stayed put rather than surrender 3 percent mortgages for 7 percent ones. First-time buyers were priced out. The result was a swelling renter pool and suppressed single-family turnover.

Meanwhile, multifamily construction surged during the Biden years. Builders followed rental demand — amplified by illegal inflows disproportionately concentrated in multifamily units — and by the inability of renters to transition into ownership.

Single-family construction, by contrast, suffered under elevated borrowing costs and frozen mobility. Now the data indicate that distortion is beginning to unwind.

Housing starts surprised to the upside this week. While total activity remains below peak levels, single-family activity is showing early signs of stabilization after quarters of rate-induced weakness.

Mortgage rates are part of that signal. They have declined from recent highs, and if the 10-year Treasury breaches the psychologically important 4 percent threshold, the 30-year fixed rate will likely fall below 6 percent.

President Trump reinforced that trajectory with a press-reported $200 billion mortgage-backed securities initiative tied to Fannie Mae and Freddie Mac. Lower mortgage rates reduce monthly payments for new buyers and pull marginal households out of rental stock and into ownership. Even modest movement from renters into entry-level homes relieves pressure on multifamily pricing.

Meanwhile, as environmental reviews, zoning restrictions, and compliance mandates are streamlined, builders can respond more quickly to shifts in demand. Faster permitting and lower carrying costs increase supply elasticity — something sorely missing in the surge years.

For working Americans, these shifts are not abstract. It is the rent check written on the first of the month. It is whether a young family can move from an apartment into a starter home. It is whether retirees can remain in their communities.

Housing is where economics and politics collide. When rents accelerate, voters punish incumbents. When rents flatten — and especially when they fall — confidence returns. If Trumpnomics continues to reverse the policy mix that drove the affordability crisis, the political argument over housing will shift decisively.

The next data points to watch are vacancy rates, single-family permits, and whether mortgage rates sustainably break below 6 percent as I am predicting— because those numbers will determine whether this affordability reset gathers real momentum.