Treasury Secretary Scott Bessent signaled Monday that President Donald Trump is weighing a declaration of a national housing emergency later this year in response to soaring home prices and limited supply.
If Trump moves forward, it would mark the first federal housing emergency since the Great Recession, when the collapse of the mid-2000s housing bubble rattled the global economy just as Barack Obama was preparing to take office.
Since returning to the White House, Trump has already announced nine national emergencies covering areas like immigration, trade, and most recently violent crime in Washington, D.C. Housing may be the next focus.
White House Options Under Review
Bessent emphasized that the administration does not want to strip states and cities of control but is exploring tools such as:
Standardized zoning codes to speed up new development
Lower closing costs for buyers
Tariff breaks on imported building materials to reduce construction expenses
The push ties into Trump’s 2026 midterm message of boosting affordability. The recently signed One Big Beautiful Bill Act included a “No Tax on Tips” measure, and aides see housing relief as another central plank of that agenda.
Economic Outlook
Bessent sounded upbeat about the broader economy, forecasting a “strong pickup in 2026,” fueled by expected Federal Reserve rate cuts and Trump’s reciprocal trade policies. Still, he admitted there are open questions about how higher tariffs might ultimately affect consumers.
A full transcript of Bessent’s interview with the Washington Examiner is expected to be published Tuesday.
Trump vs. the Fed
Housing policy has become one of Trump’s biggest points of contention with Federal Reserve Chair Jerome Powell. In August, Trump accused Powell of crippling the industry by keeping rates too high, saying Americans are struggling to qualify for mortgages.
On Truth Social, Trump blasted:
“Could somebody please inform Jerome ‘Too Late’ Powell that he is hurting the housing industry, very badly? People can’t get a mortgage because of him. There is no inflation, and every sign is pointing to a major rate cut.”
Lessons From 2008
The warning signs of a housing crunch inevitably evoke comparisons to 2008, when years of easy credit and risky mortgage lending created a bubble that eventually burst. Subprime loans, adjustable-rate mortgages, and securitization on Wall Street spread fragile debt across the financial system.
When rates climbed and home prices stopped rising, defaults skyrocketed. Millions of homeowners ended up owing more than their homes were worth, foreclosures spiked, and mortgage-backed securities collapsed in value.
Confidence in the banking system evaporated, interbank lending froze, and several major financial institutions either failed or required emergency bailouts. The crisis quickly spread worldwide, wiping out jobs, household wealth, and stability.
The government responded with bank rescues such as TARP, aggressive Federal Reserve measures including near-zero rates and quantitative easing, and later reforms like Dodd-Frank and the Consumer Financial Protection Bureau, which tightened lending standards, restricted risky trading, and imposed stress tests on large banks.
Looking Ahead
While today’s housing challenges stem from different pressures—high borrowing costs, limited inventory, and construction bottlenecks—the administration is moving to position Trump as the candidate offering solutions on affordability, hoping to make housing relief a political centerpiece heading into the 2026 elections.
