Homebuilding stocks climbed on Tuesday after reports emerged that some of the nation’s largest builders are developing a plan to draw private capital into new housing production as part of a so-called "Trump Homes" program aimed at tackling the U.S. affordability problem.
In early trading, Lennar Corp. rose more than 6.7% and Taylor Morrison Home Corp. increased by roughly 5.5% following the disclosure of the proposal.
According to people familiar with the discussions, the outline under consideration would permit private investors to deploy billions of dollars into housing development. One variation of the concept would see builders sell entry-level homes into a pathway-to-ownership vehicle funded by private capital.
Under that structure, the program would operate on a rent-to-own basis, with tenants' monthly payments over a three-year period potentially counting toward a down payment should they choose to buy the property. Proponents of the approach have discussed the possibility of developing as many as 1 million homes through the initiative, a scale that could represent more than $250 billion worth of housing.
Despite the size of the potential program, the report noted that the plan would be complex to implement and may not secure the backing necessary to proceed. Separately, a White House official said the administration is not currently actively considering the proposal.
The proposal comes amid other initiatives promoted by President Trump intended to lower housing costs. Those measures include a recommendation to lower mortgage rates by directing Fannie Mae and Freddie Mac to buy mortgage-backed securities and efforts aimed at preventing institutional investors from purchasing single-family rental homes.
Context and market impact
- The immediate market reaction was a notable uptick in homebuilder share prices, led by Lennar and Taylor Morrison.
- The proposal centers on mobilizing private funds to expand entry-level housing supply through a rent-to-own and pathway-to-ownership mechanism.
- The scale discussed by participants could be substantial if fully enacted, but political and practical obstacles remain.
Takeaway
While the idea has driven a near-term rally in select homebuilder stocks, significant uncertainty about execution and policy support leaves the proposal’s ultimate impact on housing supply and affordability unresolved.