Comprehensive Analysis of the Impact of Trump's Policy Proposals on the U.S. Real Estate Market

Based on reports from multiple authoritative research institutions I collected (including Cushman & Wakefield, JPMorgan, Urban Land Institute, etc.), I will provide you with a systematic analysis of the comprehensive impact of Trump’s policy proposals on the U.S. real estate market.

The policy proposals of the Trump administration impact the real estate market through multiple channels, mainly including four core drivers:

, , , and [1][2]. Fiscal stimulus and tax cut policies are expected to boost corporate profits and consumer spending, increasing demand for commercial real estate space; deregulation may promote growth in sectors such as finance, energy, technology, and housing, creating stronger space demand[1]. However, the inflationary pressure from tariff policies may push up interest rates, creating a headwind for commercial real estate[1][2]. Tighter immigration policies may slow labor force growth, affecting the construction industry and driving up labor costs[1][2].

From a macro perspective, J.P. Morgan Research forecasts that overall housing prices will rise by approximately 3% in 2025. Despite this growth expectation, the real estate market may still remain in a “largely frozen” state[3]. According to Realtor.com’s 2025 housing forecast, the average mortgage rate is expected to be around 6.3%, potentially dropping to 6.2% by the end of the year, while housing prices are projected to increase by 3.7%[3].

: Trump has pledged to open up federal land for housing construction and relax environmental regulations to speed up permit approvals for commercial and residential construction[4]. This may reduce developers’ acquisition costs, and when combined with tax incentives, make new residential property transactions more feasible[4]. In February 2025, single-family home construction starts increased by 11.4%, and FHA mortgage applications rose by 11% in early March, representing a 31% year-over-year increase[3].

: Trump has proposed a policy to prohibit large institutional investors from purchasing more single-family homes. According to his social media statement, this measure aims to protect homeownership as part of the American Dream. While this policy may have a certain impact on the residential market involving institutional investors, the actual effect depends on implementation details and exemption clauses[5].

: Tariff policies have a particularly significant negative impact on the residential market. The U.S. relies on imports for 80% of its softwood lumber, and the 25%-50% tariffs on steel and up to 145% tariffs on imported goods from China have directly driven up construction material costs[6]. Mortgage rates peaked at 7.1% on April 11, 2025, partly due to new tariffs pushing up construction material costs[3].

: Tighter immigration policies pose a serious threat to the construction industry’s labor market. According to data from Chmura, 28.6% of construction workers are immigrants, 21.0% of whom are non-citizens[6]. Restricting immigration will exacerbate the existing labor shortage, while the construction industry needs to add 439,000 new workers in 2025[6]. Inflation caused by tariffs has also increased workers’ demands for higher wages, further squeezing developers’ profit margins[6].

: Higher construction costs are passed on to homebuyers, reducing the affordability of new homes. However, rising construction costs may make existing properties more attractive in terms of value, as replacement costs increase and new housing supply becomes more limited[3].

: Tariff policies may act as a tailwind for industrial real estate. To cope with tariff risks, enterprises are restructuring their supply chains, promoting nearshoring and reshoring operations, which increases demand for domestic logistics and industrial space[2][6]. While facilities near ports face the risk of slower commodity flow, inland logistics centers may benefit from supply chain restructuring[7].

: Analysis from the Townsend Group suggests that tariffs may act as a tailwind for industrial warehouse real estate, particularly warehouses located within domestic supply chains[7]. However, warehouses near ports and borders may come under pressure due to slower commodity flow[7]. Prologis reported strong Q1 earnings and occupancy rates, but maintained its 2025 guidance rather than raising it due to tariff uncertainty[6].

: The potential impacts of government office-related policies are mixed. Policy changes have varying impacts on different markets[7]. Demand for federal office space may change, but the extent of the impact depends on specific policy implementation. JPMorgan notes that the commercial real estate industry is expected to experience a U-shaped recovery, and may stay near the current low point for a longer period than historical cycles[2].

: Government policy uncertainty will drive financial market volatility, weakening business and consumer confidence. Economic slowdown may lead to lower occupancy rates and higher vacancy rates[7]. However, offsetting factors include declining long-term interest rates and lower debt costs[7].

: Risks facing the retail industry include potentially higher tenant costs, supply chain and inventory disruptions, and reduced consumer spending. The Consumer Confidence Index fell 11.3% year-over-year to 60.5% in June 2025[6]. The deterioration in consumer sentiment directly impacts the foot traffic and sales performance of retail properties.

: Many retailers have diversified their supply chains after the pandemic. Shopping centers dominated by service-oriented tenants (entertainment, fitness, healthcare) face lower exposure risks. Essential goods retailers (Walmart, Home Depot, Lowe’s) and strong category retailers are expected to thrive in the long term due to their robust balance sheets[6].

: Multifamily housing developers face particularly prominent tariff risks. AvalonBay (with a $1.6 billion construction pipeline in 2025) estimates that tariffs may increase hard construction costs by approximately 5%, driving up the overall project cost base by 3%-4%[6]. This may render some projects economically unfeasible, although the backdrop of declining construction starts is offsetting some of the risks.

: The government’s initiatives to prioritize expanding housing supply and reducing costs may ease multifamily housing development pressure through regulatory reforms (zoning, construction rules)[2]. The increase in the FHFA agency multifamily loan purchase limit in 2026 signals positive financing availability and market activity[2].

: The Dow Jones U.S. Select REIT Index fell by approximately 6.24% immediately after the tariff announcement in April 2025, but had recovered nearly all losses by June 10, with a decline of less than 1% compared to the end of March level[6]. This performance demonstrates the resilience of REITs to tariff news.

: Defensive, less cyclical REIT sectors (wireless towers, net lease, healthcare/nursing homes) have outperformed the broader market[6]. Economically sensitive sectors (hotels, offices, retail) have lagged, with negative year-to-date returns[6].

: Some tenants accelerated imports before the tariffs took effect, while others suspended new leasing decisions due to uncertainty[6]. Facilities near ports face a higher risk of slower commodity flow – container imports at the top 10 U.S. ports fell 9.7% month-over-month and 7.2% year-over-year in May 2025[6].

: Weak consumer sentiment and rising consumer goods costs passed on from tariffs pose dual pressures[6]. Properties dominated by essential goods retailers have performed relatively steadily.

: Healthcare REITs such as Ventas have performed relatively steadily. The company raised its new investment guidance from $1 billion to $1.5 billion, indicating strong pipeline opportunities[6].

: Analysis from Principal Financial indicates that REITs may benefit from defensive market rotations. In an environment of uncertainty, investors should consider allocating to less cyclical REIT sectors[8]. REITs may be favored by investors as an allocation tool during defensive market rotations[8].

: REITs view tariffs as a potential one-time short-term impact, and investment strategies remain focused on larger trends (demographics, employment, technology)[6]. Declining real yields may become an important tailwind for REIT performance[8].

: Given the soaring costs of new construction and constrained supply, existing properties may be more attractive in terms of value. Investors should focus on value-add opportunities for existing properties in markets with high construction costs[3].

: Consider how local economic factors (including employment trends and population growth) buffer or amplify the impact of national policies on the target market[3]. Investing in regions with low dependence on imported construction materials can reduce the risk of tariff pass-through.

: Amid uncertainty, homebuyers should assess their personal financial stability, closely monitor mortgage rates, lock in fixed rates if closing within 60 days, and account for higher costs in their new home budget[6].

: Diversify investments across different asset classes (industrial, self-storage, data centers) and geographic markets to reduce concentration in regions sensitive to imported materials or with strong local demand[6].

: Prioritize developers that use domestic materials, and adopt modular/prefabricated construction to reduce dependence on tariff-impacted imported materials[6]. Focus on assets with resilient cash flows (industrial, self-storage, workforce multifamily housing)[6].

: Use fixed-rate debt to hedge interest rate fluctuations, and maintain liquidity to seize distressed asset opportunities[6]. Capital management is a key strategy to address interest rate uncertainty[8].

: Amid economic uncertainty, prioritize allocation to defensive REIT sectors (wireless towers, net lease, healthcare) and underweight economically sensitive sectors (hotels, offices, retail)[6][8].

: Most REITs have maintained stable 2025 financial guidance (except Ventas, which raised its guidance), indicating management confidence in operational fundamentals[6]. Pay attention to REITs that have raised their guidance, as this may signal industry opportunities.

: REITs are regarded as long-term investment tools, and policy impacts take time to emerge. Investors should focus on fundamental drivers (demographics, employment growth, technological change) rather than short-term policy noise[2][6].

: The OECD has lowered its 2025-2026 global growth forecast to 2.9%, and U.S. growth is expected to slow to 1.6% in 2025 and 1.5% in 2026[6]. Slower economic growth may reduce space demand, but it may also lower new supply growth at the same time.

: The impacts of many policies depend on the timing, scope, and enforcement intensity[4]. The rapid changes in Trump administration policies increase the difficulty of forecasting.

: Moody’s predicts that the Federal Reserve will gradually cut interest rates from 4.25%-4.50% to 2.50%-3.00%, but expects the 10-year Treasury yield to remain between 4%-5% for the “foreseeable future”[2]. Sustained high interest rates pose ongoing pressure on commercial real estate financing.

: Tariffs and immigration restrictions may push up inflation, limiting the Federal Reserve’s room to cut interest rates and creating compound pressure on real estate[2][6].

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[1] Cushman & Wakefield - Trump 2.0 & Implications for Property (https://www.cushmanwakefield.com/en/united-states/insights/trump-and-implications-for-property)

[2] J.P. Morgan - How Will the Second Trump Administration Impact CRE? (https://www.jpmorgan.com/insights/real-estate/commercial-real-estate/how-will-the-second-trump-administration-impact-cre)

[3] Ronival - Trump’s housing policies: how they could impact your property (https://ronival.com/trump-policies-how-impact-property/)

[4] Crowd Street - CRE Outlook Under a Trump Presidency (https://crowdstreet.com/resources/economic-trends/trump-presidency-commercial-real-estate-impact)

[5] 8 News Now - Real estate expert weighs in on Trump’s housing pledge (https://www.8newsnow.com/news/real-estate-expert-weighs-in-on-trumps-housing-pledge/)

[6] Urban Land Institute - REITs Offer Insights into Early Tariff Impacts (https://urbanland.uli.org/development-and-construction/reits-offer-insights-into-tariff-impacts)

[7] The Townsend Group - The Trump Factor and Commercial Real Estate (https://www.townsendgroup.com/research-article/the-trump-factor-and-commercial-real-estate/)

[8] Concreit - Trump Tariffs and Their Potential Impact on Real Estate (https://www.concreit.com/blog/trump-tariffs-impact-on-real-estate)