The most powerful voting bloc—homeowners—is financially incentivized to oppose new housing development that would lower prices. This political reality means politicians cannot address housing affordability without alienating their core voters, leading to policy stagnation and an intractable crisis.

The most effective way to lower housing prices is to increase supply. Instead of artificially freezing rents, which discourages investment, policymakers should remove regulations that make building new units difficult. More construction creates more competition, which naturally drives down prices for everyone.

The administration's focus on affordability is a targeted political effort, not a broad economic one. Policies are designed to appeal to lower-income consumers, younger voters, and renters—the specific demographics where the president's approval ratings have seen the largest declines. This makes affordability policy a direct tool for political recovery.

A serious approach to the affordability crisis requires a multi-year strategy targeting the biggest cost drivers: housing (massive supply increase), healthcare (nationalization), and education (income-based tuition), combined with aggressive antitrust enforcement. Piecemeal solutions from either party fail to address the systemic nature of the problem.

While minor policy tweaks like fee adjustments could lower mortgage costs by 10-15 basis points, more transformative changes are being considered. Allowing homeowners to take their existing mortgage to a new home ("portability") could have a much larger impact on housing market liquidity, but implementing such a change retroactively is deemed extremely difficult from a legal perspective.

Presidential proposals on housing affordability, like capping institutional ownership, are constrained by more than just politics. Procedural rules in Congress, such as the requirement for budget reconciliation bills to have a significant fiscal impact, can render such initiatives non-permissible, severely limiting the executive's ability to enact them.

Given a tight legislative calendar and procedural hurdles in Congress before an election, sweeping legislation is improbable. The administration is more likely to rely on executive actions, like agency directives and tariff policy changes. These tools can be implemented quickly and unilaterally to provide voters with a tangible impact ahead of November.

The core of the affordability crisis plaguing American families is a national shortage of 3-4 million housing units, particularly for middle-income workers and first-time buyers. This is not just a collection of local zoning issues but a macroeconomic problem that directly impacts consumer sentiment and economic well-being.

Despite expected legislative gridlock, investors should focus on the executive branch. The president's most impactful market tools, such as tariff policy and deregulation via executive agencies, do not require congressional approval. Significant policy shifts can therefore occur even when Congress is divided and inactive.