Several homebuilder stocks got a boost Tuesday, following a report the Trump administration is considering a program to build more new homes.
Lennar (LEN) and Taylor Morrison Home Corp. (TMHC) have worked on a pitch to the Trump administration to build up to 1 million new homes that could become part of a rent-to-own program, Bloomberg reported Tuesday.
Shares of Lennar and Taylor Morrison each gained over 3% Tuesday. Other homebuilders not directly mentioned in the report such as KB Home (KBH), PulteGroup (PHM), and D.R. Horton (DHI) also rose, at a time when broader markets declined.
A White House official told Investopedia the Trump administration “is constantly exploring new policy actions” related to affordability, but characterized reporting ahead of an official announcement as “speculation.” Lennar declined to remark on the report, and Taylor Morrison didn’t immediately respond to a request for comment.
Why This News is Significant
The Trump administration has taken steps to explore a number of proposals around housing affordability, including different methods to lower mortgage rates or change the structure of a typical mortgage.
One version of the proposal floated by homebuilders could see the companies build and sell entry-level “Trump homes” backed by private investors, per Bloomberg. Those homes would then offer a pathway to ownership for renters, in which the first three years of rent payments could be counted toward a down payment, the report said.
However, many details such as the potential involvement of federally-backed mortgages, have yet to be ironed out, Bloomberg reported.
