• Trump accuses Fed Chair Powell of stifling housing market by keeping rates high.
  • Proposal to eliminate capital gains taxes on primary residences gains traction among Republicans.
  • Housing affordability crisis persists as mortgage rates hover near multi-decade highs.

Trump Takes Aim at Powell Over Housing Woes

Former President Donald Trump has publicly criticized Federal Reserve Chair Jerome Powell for the sluggish U.S. housing market, arguing that persistently high interest rates are suppressing activity. "If Powell would do his job and cut rates, we wouldn't need these other measures," Trump said, referring to recent Republican proposals to stimulate the housing market through tax policy changes.

The comments come as Congresswoman Marjorie Taylor Greene leads a legislative push to eliminate capital gains taxes on primary residences - a move Trump has signaled support for, though he maintains rate cuts would be more effective. Current IRS rules exempt up to $250,000 ($500,000 for married couples) of capital gains from home sales, thresholds unchanged since 1997 despite soaring home prices.

Market Realities Collide With Political Pressure

With 30-year mortgage rates still above 6%, housing affordability remains near historic lows. The National Association of Realtors estimates millions of homeowners now exceed the existing capital gains exemption caps, particularly in high-cost markets. "We're seeing transactions freeze up," said one industry analyst who asked not to be named. "Between the rates and the tax situation, people feel stuck."

While some economists warn that premature rate cuts could reignite inflation, political pressure on the Fed is mounting ahead of the 2026 midterms. The housing market's weakness has become a focal point in economic debates, with Republicans framing it as a consequence of monetary policy missteps.

Uncertain Path Forward

Banking and real estate sources describe an increasingly tense standoff between policymakers and market realities. "The Fed's in a tough spot," noted a senior executive at a major mortgage lender. "They're getting it from all sides, but the inflation data hasn't cooperated enough for dramatic cuts."

Meanwhile, the capital gains tax proposal continues gaining support among House Republicans, though its prospects remain uncertain. Analysts note that while eliminating the tax could benefit long-term homeowners, it would do little to address the immediate affordability crisis driven by high rates and limited inventory.

Editor's Note: This article has been updated to clarify the current capital gains exemption thresholds.