By Teresa Rivas

The ballooning costs of buying a home have put homeownership out of reach for many Americans for quite some time, and last week the White House weighed in.

"We may declare a national housing emergency in the fall," Treasury Secretary Scott Bessent told the Washington Examiner in a Labor Day interview, but provided scant detail beyond suggesting the administration is looking at ways to standardize building and zoning codes and trim closing costs.

Some are experts are concerned that such an emergency declaration would amount to an empty gesture. Although an affordability crisis is undoubtedly ongoing, there are no simple solutions, and many steps that could start to address the issue run counter to President Donald Trump's other goals.

"There are no shortcuts to answering this problem, because it took a long time to create," says Andrew Wells, chief investment officer of investment management firm SanJac Alpha. "Either mortgage rates have to come down, or the cost of things associated with homeownership like insurance have to come down. Addressing those things keeps us away from red herrings and Band-Aid fixes like those we've seen in the past few years."

Of course, there is no guarantee that any patches, big or small, are in the pipeline. Moreover, it "remains unclear exactly what kind of emergency measures the administration could take to address housing, or even if using emergency powers in this way is lawful," notes Realtor.com senior economist Joel Berner. (Realtor.com's parent company, Move Inc., is a subsidiary of Barron's publisher News Corp.)

Assuming a declaration is issued, there are practical limitations on what the White House could do in terms of addressing long-term affordability issues. Some of the president's keystone policies, like tariffs and mass deportations, are contributing to housing costs, given increasing prices for things like lumber, steel, and labor.

Although most of the market is focused on interest-rate cuts that Trump has demanded, which may come as early as this month, they won't necessarily bring down mortgage rates. After the last round of rate cuts in 2024, mortgage rates actually finished the year higher, as they (and long-dated Treasuries) take into account other data, including inflation and economic expectations.

The Federal Reserve could introduce some form of quantitative easing that would bring down rates, but that would very likely also stoke inflation, Wells says: "There may be an immediate benefit, but not much, and it's not going to solve the overall problem."

He notes that an out-of-the-box solution would be to allow current homeowners with low rates to move with them. The government could use mortgage giants Fannie Mae or Freddie Mac to provide a transfer of a homeowner's 3% pandemic-era rate. That would be an incentive to get them back in the market the way today's 7% rates wouldn't, but comes with a host of other complications.

Likewise, he warns that if the government offers some kind of tax rebate or subsidy, that only goes so far in helping Americans buy "an unaffordable asset, and you're back to printing checks again," like the pandemic-era stimulus checks that contributed to inflation and higher housing prices, he says.

The housing bubble and subprime-mortgage crisis helped kick off the 2008-09 global financial crisis, so there was a natural reluctance to build homes in the immediate aftermath. However, some 20 million households have been formed since, and only 18 million homes have been built.

There are some actions the president could try to increase supply, but these are likely to be met with resistance.

"Overriding, or at least standardizing, local laws on zoning would be a great step toward allowing builders to deliver the inventory needed," says Berner. "Streamlining the permitting process and putting fewer restrictions on builders would be a great way to augment home inventory."

That likely would boost builder stocks. The iShares US Home Construction exchange-traded fund is slightly trailing the S&P 500 this year, although some builders, like D.R. Horton and PulteGroup, have surged more than 25%. Others, like Lennar and NVR, have lagged behind.

Buddy Hughes, chairman of the National Association of Homebuilders, also hopes deregulation will be part of any executive action, arguing for "a secure and affordable supply chain of building materials, and enacting policies that address a lack of skilled labor in construction. A proactive agenda to bring down material, construction, and labor costs will also help."

The problem is that many high-demand areas, like the Northeast, are likely to want to keep their local regulations for safety and environmental reasons -- and blue states are more likely to challenge changes in court. And once again, addressing things like labor shortages and raw-material costs can run counter to the administration's immigration and trade agendas.

Still, any well-reasoned action would be better than nothing. According to the builders' trade group, 75% of American households can't afford a median-price new home.

On the one hand, that means there could be ample public support to smooth the way for any popular policies that ease this crisis. On the other hand, any lasting solution will necessarily be multipronged and take time to implement. That won't fit neatly into a flashy press conference, which could be a hard sell for a president who prefers quick home runs.

No matter what happens, it seems as if the current house of cards can't stand much longer.

Write to Teresa Rivas at teresa.rivas@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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September 05, 2025 04:00 ET (08:00 GMT)

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