President Trump has known as on the massive dwelling builders to construct extra properties in a brand new social media publish.It’s no secret that housing affordability is horrible in the mean time, and one of many causes is a scarcity of accessible for-sale provide.As everyone knows from economics 101, or just day by day life, the larger the availability of one thing, the decrease the value.So if the builders determined to construct extra properties, we’d arguably see asking costs fall, thereby enhancing affordability.The issue is the house builders are already sitting on a provide glut they usually’re for-profit corporations.Trump Accuses Huge Dwelling Builders of Sitting on Empty LotsWhile Trumps’ Fact Social publish above is perhaps well-intentioned (who doesn’t need a cheaper home to purchase), it’s not essentially possible.In his publish, he in contrast the massive dwelling builders to OPEC, claiming the latter “saved Oil costs excessive.”He added that “it wasn’t proper for them to try this,” and stated it was now “being achieved once more.”Nonetheless, this obvious cartel is being dedicated “by the Huge Homebuilders of our Nation” this time round, who he goes on to say are his pals.The President identified that “they’re sitting on 2 Million empty tons,” which he claimed is a report, whereas concurrently asking for Fannie Mae and Freddie Mac to get them constructing extra.It’s unclear what that plan to get them going is perhaps, however you’d assume some type of financing deal to make homeownership extra engaging if it entails the GSEs.Some type of incentive for first-time dwelling patrons to place the American Dream again inside attain.Whereas it sounds good on the floor, it’s exhausting guilty the house builders for the present provide shortfall.They’re already sitting on too many properties within the communities the place they’ve constructed, which explains why they’re providing report incentives to their prospects.If they’ve to supply main incentives, together with large mortgage price buydowns, to maneuver stock, it makes little sense to construct extra.Exacerbating that is the price of provides to construct properties due to tariffs, one thing the Trump administration applied.And maybe the price of labor, which has probably been disrupted as a consequence of sweeping raids of unlawful immigrants.Poor Housing Affordability Has Already Led to a Provide Glut of Newly-Constructed HomesNow let’s take into account new dwelling provide, which elevated to 490,000 items as of the top of August 2025, per the Census Bureau.Whereas it was 1.4% under the July 2025 estimate of 497,000, it was 4% above the August 2024 estimate of 471,000.And the one purpose it’s not a lot larger is due to a shock scorching new dwelling gross sales print final month.That shock print additionally pushed the availability of recent properties on the market right down to 7.4 months, which was under the 9.0 months in July and the August 2024 estimate of 8.2 months.Nonetheless, previous to this sudden flip decrease it was approaching 10 months of provide, which solely occurred in September 2022 when mortgage charges greater than doubled.And in 2008, when the mortgage disaster led to one of many worst housing downturns in historical past.What’s extra, economists don’t even appear to imagine the August new properties report knowledge, which is topic to large revisions.It additionally appeared to battle deeply with dwelling builder sentiment, which has been fairly poor, and trade chatter that has pointed to weak purchaser exercise.Simply take into account a current quote from Lennar’s Co-CEO Stuart Miller throughout their third quarter 2025 earnings launch.He stated, “We imagine that now is an efficient time to average our quantity and permit the market to catch up.”In the course of the quarter, the corporate delivered 21,584 properties and recorded 23,004 new orders, however not with out main concessions.“Attaining these outcomes required further incentives, leading to a lowered common gross sales worth of $383,000, and our gross margin drifted right down to 17.5%, whereas our SG&A bills got here in at 8.2%, reflecting the delicate market situations.”Then there’s D.R. Horton, the nation’s high dwelling builder, whose Govt Chairman David Auld stated, “New dwelling demand continues to be impacted by ongoing affordability constraints and cautious shopper sentiment.”“We anticipate our gross sales incentives to stay elevated and enhance additional through the fourth quarter,the extent to which is able to rely on the power of demand through the the rest of summer time, adjustments in mortgage rates of interest and different market situations.”Purchaser Demand Is Weak and New Houses Aren’t Positioned within the Proper PlacesIn different phrases, the nation’s two largest dwelling builders are saying the identical factor. Purchaser demand is weak as a consequence of a scarcity of affordability.And the one strategy to transfer properties proper now could be to supply large incentives to prospects.One main technique currently has been the mortgage price buydowns, which each builders make use of through their captive mortgage lenders, Lennar Mortgage and DHI Mortgage, respectively.Asking them to construct much more properties and take a haircut on pricing simply didn’t make sense.Additionally, the locations the place they’ve land and construct aren’t essentially the place we want extra new properties.Sadly, dwelling builders usually solely construct within the outskirts of main metros, the place there’s already ample provide.Constructing much more properties in faraway locations received’t remedy this housing disaster.We want extra present dwelling provide in locations the place households truly need to reside. However a lot of it’s off the market as a consequence of issues like mortgage price lock-in.Maybe incentivizing present householders to promote is a greater technique than persevering with to construct the place folks don’t need to purchase.Learn on: Ought to I purchase a brand new dwelling or a used dwelling? Earlier than creating this website, I labored as an account government for a wholesale mortgage lender in Los Angeles. My hands-on expertise within the early 2000s impressed me to start writing about mortgages 19 years in the past to assist potential (and present) dwelling patrons higher navigate the house mortgage course of. Observe me on X for warm takes.Newest posts by Colin Robertson (see all)