Americans Are Losing Faith in Trump’s Ability to Fix Housing Market, 70% Fear an Impending Crash

As the spring homebuying season kicks into gear, a growing number of Americans are staring at the housing market with unease, and many are pointing fingers at Washington.

Despite former President Donald Trump’s campaign promises to lower mortgage rates, curb inflation and make homes more affordable, confidence in his ability to deliver is slipping.

New surveys show 70% of Americans fear a housing market crash is looming while 81% worry that Trump’s trade policies, particularly his tariffs, could make things worse.

Home sales are crawling at their weakest pace since the aftermath of the Great Recession. In January, sales crept along at an annual rate of just 4.7 million, barely above the dismal figures seen between 2008 and 2010.

And yet home prices keep climbing. The Case-Shiller index, a key measure of U.S. home values, rose 4.1% in January compared with a year earlier.

“There’s no doubt that the current state of the housing market is a source of anxiety,” says Joel Berner, senior economist at Realtor.com. Buyers are stuck with steep mortgage rates, and those rates aren’t likely to drop anytime soon thanks to inflation pressures from Trump’s trade policies, he adds.

Why Tariffs Are Adding Fuel to the Fire

Trump’s aggressive tariff strategy—a hallmark of his economic agenda—isn’t winning over many fans. A Clever Real Estate survey found 72% of Americans believe tariffs will hurt the U.S. economy while 32% fear they won’t be able to afford their housing payments if economic conditions worsen.

Tariffs will certainly drive up the costs of imported goods, which can feed into inflation. And when inflation stays high, the Federal Reserve hesitates to cut interest rates, keeping mortgage rates stubbornly elevated.

Mortgage rates have seriously slowed the housing market, Berner says. Many would-be sellers are locked into the low rates they got a few years ago and don’t want to move. At the same time, buyers are seeing their budgets stretched thin.

A Generation Priced Out

Young Americans are feeling the pinch the most. A Realtor.com report estimates that Gen Z and millennial household formation fell short by 1.6 million last year, largely because affordable housing is so scarce.

Many are stuck in a holding pattern: they want to buy, but between student debt, rising rents and mortgage rates hovering near 7%, the math just doesn’t work.

And hopes for relief anytime soon are fading. The New York Fed’s latest survey found households now expect mortgage rates to stay at 7% or higher for years—a record level of pessimism.

Is a Crash Really Coming?

Despite the doom and gloom, Berner doesn’t see a 2008-style collapse on the horizon. Demand for homes is still strong, and if prices did drop, a wave of pent-up buyers would likely rush in.

If home prices did drop, we’d expect a flurry of buying activity from households waiting on the sidelines, he says. That would naturally buoy the market.

Still, the mood is bleak for now. Fannie Mae’s homebuying sentiment index dipped in February, with only 24% of Americans saying it’s a good time to buy. Even more concerning, though, is the share of people who expect their personal finances to worsen over the next year jumped to 22%—the highest level in over a year.

The big question is whether mortgage rates will finally ease up. Realtor.com’s forecast predicts they could dip into the low 6% range by year’s end, but Berner admits that rates in the high 6% or even 7% range are still possible.

The housing market could be a major weak spot for Trump if voters don’t see relief soon.