President Donald Trump recently urged potential homebuyers to exercise patience, suggesting they “save a little money, wait a little longer” for mortgage rates to decline further. This message comes as voters express growing dissatisfaction with the economy and the increasing difficulty of affording a home.
Administration Efforts to Lower Housing Costs
Trump’s call for patience echoed comments made during his State of the Union address, where he acknowledged potential limitations to federal influence on housing prices. He stated that lower interest rates would “solve the Biden-created housing problem” while as well benefiting current homeowners.
The administration has explored various proposals to address affordability, including 50-year mortgages and “portable” mortgages, though some were later abandoned. Currently, a key initiative involves directing Fannie Mae and Freddie Mac to purchase $200 billion in mortgage bonds, a move projected to lower mortgage rates by up to 50 basis points.
Legislative Push and Investor Concerns
The White House is also advocating for legislation to prevent institutional investors from acquiring additional single-family homes. However, given that small investors represent over 90% of the investor market, the impact of such a ban on overall prices remains uncertain. Large institutional investors currently own approximately 2-3% of the nation’s single-family rental stock, representing less than 0.5% of the total housing stock.
Trump has voiced optimism regarding potential interest rate reductions under Kevin Warsh, his nominee to replace Jerome Powell as Federal Reserve Chair. However, the Federal Reserve’s future course of action, and its effect on mortgage rates, remains unclear.
Frequently Asked Questions
What did President Trump say about mortgage rates?
President Trump advised potential homebuyers to “save a little money, wait a little longer” for mortgage rates to decrease further.
What is the administration doing to lower mortgage rates?
The administration ordered Fannie Mae and Freddie Mac to purchase $200 billion in mortgage bonds, which is expected to lower mortgage rates by as much as 50 basis points.
Is the administration trying to limit investor purchases of homes?
Yes, the White House is pushing Congress to pass legislation that would bar institutional investors from buying additional single-family homes.
Will these efforts successfully lower housing costs for prospective buyers remains to be seen, and depends on a variety of economic factors and policy decisions.
