{"id":183962,"date":"2025-07-23T11:38:33","date_gmt":"2025-07-23T17:38:33","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=183962"},"modified":"2025-07-23T11:39:01","modified_gmt":"2025-07-23T17:39:01","slug":"what-trumps-housing-plan-could-do-for-real-estate-investors","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/what-trumps-housing-plan-could-do-for-real-estate-investors","title":{"rendered":"Trump\u2019s Housing Plan: Could It Lower Home Values and Unlock Investment Opportunities?"},"content":{"rendered":"\n

After watching <\/span>George Gammon\u2019s video<\/span><\/a> discussing President Trump\u2019s recent housing executive order, I felt motivated to <\/span>take<\/span> his macroeconomic insights <\/span>and contemplate them<\/span> specifically <\/span>for<\/span> real estate investing using self-directed IRAs.<\/span> While George\u2019s focus is on broader economic implications, here we\u2019ll explore how those same developments could influence self-directed investing\u2014particularly in the real estate sector.<\/span><\/p>\n\n\n\n

President Donald J. Trump\u2019s <\/span>executive order<\/span><\/a> aims to make housing more affordable by reducing regulatory burdens, expanding supply, and encouraging private-sector involvement. <\/span>For investors using self-directed IRAs<\/span>\u2014with<\/span> features such as checkbook control and the ability to invest in a broad array of asset classe<\/span>s\u2014t<\/span>his policy shift could present new opportunities to diversify into real estate.<\/span><\/p>\n\n\n\n

Understanding the Impact of Regulations on Housing Prices<\/span><\/h2>\n\n\n\n

Government regulations have long influenced the cost of developing residential and <\/span>multifamily<\/span><\/a> properties. The National Association of Home Builders (NAHB) <\/span>estimates<\/span><\/a> that, as of 2021, regulations account for nearly <\/span>23.8%<\/span><\/strong> of the final price of a new single-family home\u2014adding an average of <\/span>$93,870<\/span><\/strong> to the cost. <\/span>In the multifamily sector, the burden is even greater, with the National Multifamily Housing Council (NMHC) <\/span>reporting<\/span><\/a> that regulatory costs <\/span>contribute<\/span> 40.6%<\/span><\/strong> to<\/span> total development expenses as of 2022.<\/span><\/p>\n\n\n\n

For investors, these numbers <\/span>highlight how<\/span> high compliance costs <\/span>may<\/span> create both challenges and opportunities.<\/span> If regulatory barriers <\/span>are lowered<\/span>, investors using self-directed IRAs may gain access to more competitively priced real estate.<\/span><\/p>\n\n\n\n

Applying a Warren Buffett-Inspired Lens to Housing Valuations<\/span><\/h2>\n\n\n\n

George Gammon raised an <\/span>important<\/span> question in his video: Are housing prices becoming detached from underlying economic fundamentals?<\/span><\/p>\n\n\n\n

To explore this, we can borrow from Warren Buffett\u2019s famous valuation approach\u2014often referred to as the <\/span>Buffett Indicator<\/span><\/strong>\u2014which compares total market capitalization to GDP to gauge whether a market <\/span>is overvalued<\/span>.<\/span><\/p>\n\n\n\n

Let\u2019s apply a similar logic to the housing market by comparing total U.S. housing market value to GDP over time:<\/span><\/p>\n\n\n\n

Year<\/th>U.S. GDP<\/a> (Trillions of USD)<\/th>Housing Market Value <\/a>(Trillions of USD)<\/th>Housing as % of GDP<\/th><\/tr><\/thead>
2000<\/span><\/td>$10<\/span><\/td>$10<\/span><\/td>100%<\/span><\/td><\/tr>
2006<\/span><\/td>$14<\/span><\/td>$23<\/span><\/td>164%<\/span><\/td><\/tr>
2012<\/span><\/td>$16<\/span><\/td>$18<\/span><\/td>112%<\/span><\/td><\/tr>
2025*<\/span><\/td>$30<\/span><\/td>$50<\/span><\/td>166%<\/span><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

*2025 figures are projected.<\/span><\/i><\/p>\n\n\n\n

When housing values exceed GDP by a significant margi<\/span>n\u2014a<\/span>s seen in 2006<\/span>, <\/span>and potentially in 202<\/span>5\u2014i<\/span>t may signal overvaluation.<\/span> For self-directed IRA investors, these indicators could be <\/span>useful<\/span> in identifying areas of risk and opportunity within the real estate market.<\/span><\/p>\n\n\n\n

Could a Market Correction Be Ahead?<\/span><\/h2>\n\n\n\n

While no one can predict the future, elevated housing values relative to GDP may point to potential corrections, especially if affordability becomes unsustainable. Some contributing factors include:<\/span><\/p>\n\n\n\n