Trump Houses: A new path for first-time home buyers

For most Americans, the foundation of wealth-building is rooted in homeownership. With home prices typically rising 3% to 5% annually, owning a home can significantly boost a household’s financial standing, especially if started early in life. Unfortunately, today’s reality presents a stark contrast to that ideal.

Just three decades ago, the median age for first-time home buyers was a youthful 28. Now, that age has swelled to 40. This 12-year delay in homeownership can translate into hundreds of thousands of dollars of lost potential wealth by the time individuals retire.

The sooner the age of first-time buyers drops, the better prepared Americans will be for a secure financial future. So, what’s behind this troubling increase?

In the 1980s, the average new home measured around 1,800 square feet. By the 1990s, that number expanded to 2,100 square feet. Fast forward to 2015, and homes reached an average size of 2,700 square feet, before falling to 2,400 square feet in 2024.

While it seems favorable that homes are larger now, this trend has inadvertently trapped first-time buyers, forcing them to wait until they are 40 to enter the housing market.

Recognizing this challenge, President Trump seeks to empower young people to purchase homes sooner.

But the increase in house size isn’t the only stumbling block. Construction labor costs have skyrocketed. In the 1990s, labor constituted roughly 25% of total construction costs, equating to about $38,000 of a $150,000 new home.

Today, labor accounts for 40% of a new home’s construction costs, driving the total price to around $425,000, with labor costs alone hovering near $170,000.

To combat this, President Trump will encourage home builders to enhance efficiency and find innovative ways to reduce labor costs. Material costs have also increased substantially, and he will advocate for builders to seek more cost-effective materials.

One straightforward solution to assist first-time buyers is to construct smaller homes. These would typically feature three bedrooms and two bathrooms and could be around 1,000 to 1,200 square feet in size.

The housing market faced a similar challenge in the late 1940s when millions of Americans became eligible for the GI Bill, which aided with down payments and provided favorable mortgages. The high demand for affordable homes was clear.

In 1947, William Levitt found a solution by eventually constructing over 50,000 homes efficiently. He purchased large swathes of land, often former farmland, divided the land into small lots, and offered a limited number of designs, which allowed the mass production of homes.

His ranch-style homes typically measured around 1,200 square feet with three bedrooms and two bathrooms, along with other models that offered more versatility.

Levitt’s assembly-line approach drastically reduced costs and made home ownership feasible for many families, prompting rapid sell-outs of his developments.

President Trump envisions a similar approach for today’s builders. He aims to promote the construction of smaller, starter homes using efficient techniques akin to those utilized by Levitt. To further incentivize this movement, Trump might offer federal land to builders at reasonable prices, keeping new home costs manageable.

Another hurdle that the GI Bill addressed was enabling home purchases with little or no down payment. Learning from the early 2000s, when no-down-payment policies contributed to a financial crisis, Trump proposes a revamped solution: the lease/purchase model.

In this framework, a future homeowner can sign an agreement to buy a new home, but first rents the property for up to three years. A portion of the rent contributes toward the down payment, eventually allowing the renter to purchase the home once enough savings accumulate to cover the down payment.

Trump’s ambitious goal is to see the construction of over one million Trump Houses.

Adding to this initiative, President Trump has implemented creative solutions with Trump Accounts, ensuring that every American has some funds available by the time they turn 18. These funds could be utilized as a down payment on a home, making the dream of homeownership more accessible.

This comprehensive plan aims to drive down starter home costs, enabling younger Americans to step onto the property ladder sooner. This should have little negative impact on the price of larger already constructed homes.

Once again, President Trump is taking decisive action to restore the American dream, making it possible for more families to achieve the cornerstone of wealth-building that is homeownership.

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