As President Donald Trump begins his second term on January 21, 2025, he faces a complex economic landscape marked by inflation and rising mortgage rates, which are significant challenges for the housing market. Despite Trump's promises to reduce inflation and mortgage rates, conflicting economic policies may hinder his efforts [644e5628].
Recent data shows that 60% of Americans viewed the economy as 'not so good or poor' in 2024, reflecting widespread concerns about economic conditions [644e5628]. In contrast, the Biden administration achieved strong GDP growth and low unemployment rates, with the economy growing at an annualized rate of 2.7% in late 2024 and the unemployment rate dropping to 4.1% [f0707a61][76d06aa0].
Trump has pledged to bring manufacturing back to the U.S., extend tax cuts, and reduce government spending, which he believes will stimulate economic growth [644e5628]. A Gallup poll indicates that 54% of Americans trust Trump on economic issues, suggesting a level of public confidence in his economic policies [644e5628]. However, economists remain divided on the potential impacts of these policies, particularly in light of the Federal Reserve's recent announcements regarding interest rates.
Federal Reserve Chairman Jerome Powell has indicated that fewer rate cuts are planned for 2025, even as mortgage rates have risen to 7.18%, complicating the housing market's recovery [644e5628]. Realtor.com forecasts that mortgage rates will average 6.3% in 2025, which could further challenge homebuyers and the real estate market [644e5628].
While Trump aims to implement tax policies that could potentially counteract inflation goals, the effectiveness of these measures remains uncertain [644e5628]. As Trump navigates these economic challenges, the outcomes of his policies will be closely monitored, particularly in light of the strong economic performance seen during Biden's term, which included a decrease in inflation from 9.1% in June 2022 to below 3% in November 2024 [012a5c44].
The economic landscape under Trump's second term will be critical in shaping his administration's policies and the overall recovery of the U.S. economy. As businesses and individuals adjust to these changes, the impact of Trump's decisions on inflation, mortgage rates, and the housing market will be pivotal in determining the success of his economic agenda [76d06aa0].