House prices skyrocketed under Biden. Now, guess who Democrats want to blame?
Over the past five years, the cost of a median house has risen 20% nationally while wages rose just 4% — and that disparity doesn't even account for increased mortgage rates.
With housing costs becoming a massive pain point for millions of American households, it's easy to see why Democrats want to avoid taking responsibility (and blame Republicans if possible).
Some, like Nevada Democrat Sen. Jacky Rosen, have taken aim at President Donald Trump's tariff policies. In a recent letter to Commerce Secretary Howard Lutnick, she warned that Trump's tariffs on Canadian lumber would "drastically increase the cost of constructing housing in the United States."
Like many economists, I'm no fan of tariffs, but in this case, Rosen's concern is nothing more than political posturing. For one thing, Biden actually increased tariffs on Canadian lumber and received very little backlash from his own party.
It's also worth noting that lumber prices alone have a relatively small impact on the cost of home construction (and shouldn't affect the price of existing homes at all).
One analysis by the National Association of Homebuilders (which advocates for low tariffs on construction materials) found that framing is the single most expensive part of building a new house, accounting for 15.5% of the final construction cost. But when you consider framing as a share of the home's sales price (which is what buyers actually care about) and try to separate out labor costs, lumber accounts for a much smaller percentage — perhaps as low as 4%. The current tariff on Canadian lumber is 14.5%.
Crunch those numbers, and it seems like wood tariffs drive up the cost of a median home by a few hundred dollars at most. That's not nothing, but it doesn't come close to explaining how home prices got so out of control.
Another Democratic line of attack, best exemplified by an exchange between JD Vance and podcast host Lulu Garcia-Navarro, has focused on immigration policy.
"So how do you propose to build all the housing necessary that we need in this country by removing all the people who are working in construction?," Garcia-Navarro asked the then-candidate for vice president.
"Well, I think it's a fair question because we know that back in the 1960s, when we had very low levels of illegal immigration, Americans didn't build houses," Vance answered, sarcastically.
It's true that non-citizens disproportionately work in construction (though not all construction workers build homes), but it's also true that they compete with citizens for scarce housing. Even the libertarian Cato Institute acknowledges that "the marginal immigrant increases housing demand more than he increases housing supply." This means that, on the whole, less illegal immigration and more deportations will mean cheaper housing.
Though, of course, the entire issue is a red herring, since the massive wave of illegal immigration under President Joe Biden coincided with a spike in housing costs. Even if it were true that tight border controls and strict immigration enforcement would make homes more expensive, it wouldn't explain how they got so expensive in the first place.
Perhaps most absurdly, Democrats and the Biden administration even tried to blame landlords' greed and the pricing algorithms they use. The Biden Justice Department sued one of these algorithms to "make housing more affordable for millions of people across the country," and Democrats in Congress have proposed similar legislation to end the use of this software. This is ridiculous. An empty apartment is a huge financial hit for a landlord. That is exactly what happens when they price their units too high — they are left holding them back.
Fortunately, while Democrats continue to scapegoat and point fingers, Republicans are aiming to fix the housing cost inflation problem with deregulation.
This means that, on the whole, less illegal immigration and more deportations will mean cheaper housing.
For example, under newly confirmed Housing and Urban Development Secretary Scott Turner, the Trump administration is working to cut red tape that many builders say has held back new construction.
Turner has announced a comprehensive review of HUD's programs. Of course, much of the red tape is state or local, but there are plenty of federal barriers that can be deconstructed as well, and that is exactly what the Trump administration plans on doing. That's a step in the right direction, which is far more than what the Democrats are currently offering. Hopefully, it's the first of many similar initiatives to come. Housing is a great populist issue that can provide endless political wins for the White House — so the more, the merrier.
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