- Former President Donald Trump highlights the strain on home buyers as mortgage rates hover near 7%.
- The Fed's inflation-fighting policies keep borrowing costs high, with the 30-year fixed rate at 6.742% as of July 2025.
- New legislation aims to ease the burden, but affordability remains a critical issue for first-time buyers.
Mortgage Rates Lock Out Buyers
Former President Donald Trump has sounded the alarm on the housing market's affordability crisis, pointing to persistently high interest rates as a key barrier for prospective home buyers. As of July 22, 2025, the average 30-year fixed-rate mortgage stands at 6.742%, a far cry from the sub-3% rates seen during the pandemic's peak.
"Elevated interest rates are causing significant problems for home buyers," Trump noted, echoing concerns from real estate professionals who report slowing sales activity as monthly payments stretch budgets. The Fed's tightening cycle, which began in 2022 to combat inflation, has kept borrowing costs stubbornly high even after policymakers started cutting rates in September 2024.
Policy Responses and Market Realities
The Trump administration recently enacted the "One Big Beautiful Bill Act," which makes the mortgage interest deduction permanent and temporarily raises the SALT deduction cap to $40,000. The legislation also expands the Low-Income Housing Tax Credit in an effort to boost affordable housing supply.
Yet with the national median home asking price at $440,950, many buyers—particularly first-timers—remain priced out. "You can't just legislate away basic math," said one anonymous mortgage banker. "When rates double and prices keep climbing, something's got to give."
Industry analysts don't foresee a return to ultra-low rates anytime soon, though some predict gradual declines if inflation continues to moderate. For now, the housing market's engine is sputtering—and political attention is turning to who gets left behind.