Trump Administration Considering Declaration of 'National Emergency' to Curb Rising Home Prices

Besant: "Real Estate Transactions Expected to Increase If Interest Rates Fall"

The Donald Trump administration is considering declaring a state of emergency to address the issue of rising home prices.

Scott Besent, U.S. Secretary of the Treasury. Photo by AP Yonhap News

According to Bloomberg and other sources on September 1 (local time), U.S. Secretary of the Treasury Scott Besant stated that the Trump administration plans to implement new measures within the next few weeks to tackle housing issues. Secretary Besant said, "President Trump may declare a national housing emergency to respond to rising home prices and the shortage of supply."

Currently, while the rate of increase in home prices in the United States is slowing, the supply shortage remains unresolved. In particular, homeowners who previously purchased homes at low mortgage rates are pulling their properties off the market, leading to a decrease in housing supply. This is because, when selling their existing homes and seeking new ones, they would have to pay much higher interest rates than before due to the current high interest rate environment.

This situation began when the Federal Reserve sharply raised its benchmark interest rate in response to soaring inflation following the pandemic. The current U.S. benchmark interest rate is 4.25 to 4.50 percent. Although mortgage rates are not directly tied to the benchmark rate, they are influenced by the 10-year Treasury yield, which is closely related to the benchmark rate.

Secretary Besant stated, "We expect that real estate transactions and home sales will increase if interest rates fall." He also added that the administration is exploring ways to streamline and standardize the permitting process to promote housing construction and increase supply.

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