Trump’s Housing Plan: Could It Lower Home Values and Unlock Investment Opportunities?

Applying a Warren Buffett-Inspired Lens to Housing Valuations

George Gammon raised an important question in his video: Are housing prices becoming detached from underlying economic fundamentals?

To explore this, we can borrow from Warren Buffett’s famous valuation approach—often referred to as the Buffett Indicator—which compares total market capitalization to GDP to gauge whether a market is overvalued.

Let’s apply a similar logic to the housing market by comparing total U.S. housing market value to GDP over time:

Year	U.S. GDP (Trillions of USD)	Housing Market Value (Trillions of USD)	Housing as % of GDP
2000	$10	$10	100%
2006	$14	$23	164%
2012	$16	$18	112%
2025*	$30	$50	166%

*2025 figures are projected.

When housing values exceed GDP by a significant margin—as seen in 2006, and potentially in 2025—it may signal overvaluation. For self-directed IRA investors, these indicators could be useful in identifying areas of risk and opportunity within the real estate market.

Could a Market Correction Be Ahead?

While no one can predict the future, elevated housing values relative to GDP may point to potential corrections, especially if affordability becomes unsustainable. Some contributing factors include:

• Regulatory cost pressures: Excessive fees and zoning restrictions drive up prices.
• Supply constraints: A limited number of new homes creates upward pressure on values.
• Macroeconomic risks: As values climb beyond income and GDP growth, corrections become more likely.

Investors with self-directed IRAs, particularly those utilizing checkbook control, may want to monitor these trends closely. With flexible access to real estate and private offerings, these investors could strategically position their IRAs ahead of potential market shifts.

Highlights of President Trump’s Executive Order on Housing

President Trump’s executive order aims to address affordability by:

Reducing regulatory burdens

• Streamlining permitting processes
• Revisiting zoning laws
• Eliminating redundant rules that increase development costs

Increasing housing supply

• Offering tax incentives and grants for developers
• Supporting new construction in underserved markets

Optimizing land use

• Promoting higher-density and mixed-use development
• Encouraging innovation in housing design and layout

Encouraging public-private collaboration

• Removing roadblocks to partnerships between government and developers
• Leveraging private capital to meet public housing goals

These proposed changes could potentially improve the economics of real estate investing and create new avenues for tax-advantaged retirement strategies.

What This Could Mean for Self-Directed IRA Investors

For those investing in real estate through a self-directed IRA, the changing regulatory and economic environment may unlock new possibilities:

• Access to more affordable properties: A potential increase in housing inventory may create pricing opportunities in specific markets.
• Improved investment margins: Lower development and compliance costs could enhance overall return on investment (ROI).
• Portfolio diversification: With the ability to invest in single-family rentals, multifamily units, or even land development, investors can build a broader real estate portfolio within their IRAs.

As always, investors are encouraged to perform due diligence, consult with legal and tax professionals, and understand the rules and responsibilities of using a self-directed IRA.

Final Thoughts: Strategy Over Speculation

George Gammon’s video presents a view of how macroeconomic forces and government policy may converge to reshape the housing market. While it’s impossible to predict the future with certainty, self-directed IRA investors may benefit by analyzing long-term trends and preparing for shifts in affordability and valuation.

President Trump’s executive order could signal a new chapter in the real estate landscape. For those who invest through self-directed IRAs, it’s an important time to stay informed, evaluate opportunities, and proceed with caution and clarity.

James P. Schlimmer is SVP, Real Estate Growth Officer, at Equity Trust Company.

BiggerPockets/PassivePockets, George Gammons, and sources used for this article are not affiliated in any way with Equity Trust Company or any of Equity’s family of companies. Opinions or ideas expressed by BiggerPockets/PassivePockets, George Gammons, or any sources are not necessarily those of Equity Trust Company, nor do they reflect their views or endorsement. As a directed custodian, Equity Trust Company is not a fiduciary and does not endorse, recommend, or opine on suitability of any specific asset class or investment. The information provided is for educational purposes only, with the understanding that neither Equity Trust Company nor its affiliates, representatives, or officers provide financial planning, tax, legal, or investing advice. Examples provided are for illustrative purposes only. Investing involves risk, including possible loss of principal. Questions related to your specific planning tax, legal, or investment needs should be directed to an attorney or financial professional. Equity Trust and Bigger Pockets/Passive Pockets may receive referral fees for any services performed as a result of being referred opportunities.