House Financial Services Committee Turns Housing Affordability Crisis Into a Proxy War Over Trump's Economic Record

Why it matters:

The House Financial Services Committee held a high-profile hearing on February 10, 2026, titled "Priced Out of the American Dream," that was supposed to diagnose why rising housing costs and borrowing costs in 2026 have pushed homeownership out of reach for millions. Instead, it became a sharp ideological clash over whether the Trump administration's deregulatory agenda is the cure — or part of the disease. The hearing came one day after the House passed the bipartisan Housing for the 21st Century Act by a 390-9 vote, giving the session an unusual backdrop: rare bipartisan legislative success colliding with deeply partisan finger-pointing over who broke the housing market.

The big picture:

This Congressional housing hearing didn't materialize from nowhere. The U.S. faces a shortage of roughly 5 million homes, according to the National Association of Realtors. First-time buyers now enter the market at a median age of 40. Mortgage rates remain elevated. Construction material costs have climbed — in part because of the Trump administration's own tariffs on lumber, cabinets, and building materials imposed under Section 232 authority in September 2025.

The National Association of Home Builders warned that new lumber duties could rise to 45% on Canadian imports. The Brookings Institution cautioned that tariffs "threaten residential construction." The Center for American Progress estimated tariffs could result in 450,000 fewer new homes through 2030.

At the same time, the administration has pursued supply-side measures: a day-one executive order on housing deregulation, a plan to open federal lands for development, an executive order blocking institutional investors from receiving government support when purchasing single-family homes, and directives to Fannie Mae and Freddie Mac to purchase billions in securities to lower mortgage rates.

The tension at the heart of this housing policy hearing: the administration is simultaneously trying to lower housing costs while imposing tariffs that raise them. As Politico reported the same day, "on housing, Trump's problem isn't willpower. It's time" — and even allies acknowledged relief is unlikely soon.

The hearing also served as a vehicle for additional legislation, including H.R. 6962, the Families First Housing Act of 2026, which would create a 180-day first-look window for qualified buyers on federal single-family home dispositions.

What they're saying:

The witness panel was stacked 3-to-1 in favor of free-market, deregulatory perspectives — a fact not lost on Democrats.

Rep. French Hill (R-AR-2), the committee chair, opened by blaming "harmful Biden-era policies marked by reckless spending" for housing costs hitting all-time highs. He credited Trump's "pro-growth policies" with reversing damage, citing GDP growth above 3% and unemployment below 4.5%.

Rep. Maxine Waters (D-CA-43), the ranking member, fired back with a different opening salvo: "$1.4 billion. That's how much the Trump family has pocketed since Trump returned to the White House." She argued tariffs have raised construction costs while immigration enforcement has shrunk the construction workforce, creating a "double bind" that reduces housing supply.

The witnesses delivered sharply divergent diagnoses:

  • Stephen Moore, co-founder of Unleash Prosperity and a former Trump economic adviser, kept it simple: "Supply, supply, supply. That's how you lower prices."

  • Kevin O'Leary, the "Shark Tank" investor, described the capital access gap for small businesses as "virtually impossible" to navigate, noting that small firms pay 15-27% for receivables financing while large companies get 7%. His written testimony called on Congress to "enact a tariff moratorium on all scarce commodities" — a direct challenge to the administration he broadly supports.

  • Brian P. Brooks, former Acting Comptroller of the Currency and now CEO of Meridian Capital Group, argued that Dodd-Frank regulations drove banks out of mortgage lending. He told Rep. Andy Barr (R-KY-6) that community banks are superior lenders because they "live in the local community where they know the asset, they know the borrower."

  • Darrick Hamilton, a New School professor and chief economist of the AFL-CIO, was the lone progressive voice. He argued that "authentic freedom is grounded in resources" and warned that closing the CDFI Fund and Minority Business Development Agency would harm underserved communities. When Rep. Al Green (D-TX-9) pressed him on lending discrimination against people of color, Hamilton responded: "We need an honest reckoning with our history."

Green used his time to push for the Fair Lending for All Act, which would create criminal penalties for knowing discrimination in lending. He told the room: "I live to see the day that we'll have a hearing comparable to this to talk about invidious discrimination in lending."

Rep. Brad Sherman (D-CA-32) took a different tack on tariffs, noting: "We've imposed tariffs on coffee and bananas just to raise a lot of revenue. We don't produce coffee and bananas here."

Rep. Ann Wagner (R-MO-2) pressed O'Leary on capital access for early-stage companies but cut him short when he began a lengthy digression on intellectual property theft: "Well, I don't have time to let you talk about it for years, sir."

Rep. Bill Foster (D-IL-11) offered a personal anecdote, describing how he and his brother started a company 51 years ago with $500 that is now worth $450 million annually and 100% employee-owned — a counterpoint to the narrative that deregulation alone creates opportunity.

Political stakes:

For the administration

The hearing exposed a fundamental contradiction in Trump's housing agenda. The White House has signed executive orders, directed GSE purchases, and blocked institutional investors — all popular moves. But the administration's tariffs on lumber and building materials are simultaneously raising construction costs, a point that even the administration-friendly O'Leary acknowledged by calling for a tariff moratorium. Meanwhile, Speaker Johnson was moving to block House votes that could overturn Trump's tariffs, preventing members from addressing one of the cost drivers witnesses identified.

For Chairman Hill

Chairman Hill had enormous stakes. He had just delivered one of the most bipartisan votes of the 119th Congress with the Housing for the 21st Century Act. He told reporters his strategy was timed to conclude "long before the very active summer campaign season," confirming housing is viewed as a potent 2026 midterm issue. His credibility as a dealmaker — and his ability to negotiate with the Senate Banking Committee — was directly on the line.

For vulnerable members

Swing-district Republicans like Rep. Mike Lawler (R-NY-17), who represents a high-cost housing area, need to demonstrate action on American Dream homeownership. The bipartisan framing of the housing package gives both parties cover, but the hearing's ideological lean toward deregulation could complicate that narrative for Democrats.

The other side:

Democrats argued the witness panel was imbalanced — three free-market voices against one progressive economist. More substantively, they contended that deregulation alone cannot solve the housing affordability crisis when tariffs are actively raising input costs and immigration enforcement is shrinking the construction labor force.

Hamilton's testimony offered the sharpest counterpoint to the majority's framing. He argued that people "are more than labor inputs to a firm's production process" and that closing agencies like the CDFI Fund and MBDA would disproportionately harm minority-owned businesses and communities already locked out of wealth-building.

Brooks, while broadly aligned with the majority, acknowledged a nuance that cut against simple deregulatory narratives: "When government rather than private sector actors start managing credit, they allocate the credit to their friends. This side has their friends, that side has their friends, but squeezing the balloon is never a good idea."

Industry groups also sent mixed signals. While NAHB praised the administration's deregulatory executive orders, its chairman simultaneously warned that tariffs on lumber "will create additional headwinds for an already challenged housing market."

What's next:

  • Senate negotiations: Chairman Hill plans to negotiate with the Senate Banking Committee on reconciling the House's Housing for the 21st Century Act with the Senate's ROAD to Housing Act. He has set an informal deadline of spring/early summer 2026.

  • Additional legislation: The committee noticed six bills for consideration, including the Families First Housing Act and the American Family Housing Act, which would prohibit investment firms with $100 billion or more in assets from purchasing single-family homes.

  • Follow-up hearings: The Housing and Insurance Subcommittee held a hearing on the secondary mortgage market the following day. Rep. Green called for a dedicated hearing on lending discrimination.

  • Tariff politics: The tension between housing affordability goals and trade policy remains unresolved, with Speaker Johnson blocking floor votes on tariff overrides even as witnesses called for a moratorium on construction material duties.

The bottom line:

Congress agrees the housing affordability crisis is real — but the hearing revealed that the administration's own tariff policy is working against its housing agenda, a contradiction neither party has figured out how to resolve before the 2026 midterms.

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