Trump's Plan to Improve Housing Affordability

President Donald Trump recently spoke at the World Economic Forum in Davos. He talked about three new policies to help make housing more affordable for Americans.

Trump wants to stop big investors from buying single-family homes. He also wants to help people buy homes by making it easier to get mortgages. Trump said America should be a nation of homeowners, not renters.

Trump's Policies

Trump's policies include stopping big investors from buying single-family homes. He also wants to help people buy homes by making it easier to get mortgages. This could make housing more affordable for Americans.

Trump's plan is to have the government-sponsored enterprises buy up to $200 billion in mortgage-backed securities. This could help lower mortgage rates and make it easier for people to buy homes.

Reaction from Real Estate Leaders

Real estate leaders think Trump's focus on housing affordability is a good thing. They like that he is making housing a priority. Chris Kelly, the CEO of HomeServices of

America, said every effort to ease pressure in the housing market is worth considering. Anthony Lamacchia, the broker-owner of Lamacchia Realty, said he loves that the president is putting housing in the forefront.

Impact of Trump's Policies

Some real estate leaders think Trump's policies could have a positive impact. They like the idea of stopping big investors from buying single-family homes.

However, they are not sure how much of an impact it will have. Mike Pappas, the CEO of The Keyes Co./Illustrated Properties, said there was no institutional market in residential single-family housing before the Great Recession.

Lamacchia shared a similar view, noting that there was a time when the housing industry was happy to see institutional investors purchase properties because inventory was so high.

Mortgage-Backed Securities

Trump's directive to have the government-sponsored enterprises acquire up to $200 billion in mortgage-backed securities could have a small impact on affordability. Expanding these purchases can have a modest impact on mortgage rates.

Lamacchia appreciates how this move would take the reserves built up by Fannie Mae and Freddie Mac and put them towards mortgage bonds. Freddie Mac raised its guarantee fees three years ago, so they are making a lot of money. It has essentially become an extra tax on buyers.

Credit Card Interest Rates

Trump's proposal to cap credit card interest rates at 10% for one year is not seen as a major solution to housing affordability.

Some real estate leaders think it could help prospective first-time buyers who are financially strained and have credit card debt at a high interest rate. However, they are not sure if it will have a big impact.

Bess Freedman, the CEO of Brown Harris Stevens, said the plan could help somewhat relieve financial constraints temporarily, but it will have to clear Congress.

Future of Housing Affordability

Real estate executives are happy to see housing issues discussed on the global stage. However, they question the size of the impact these measures could have on housing affordability. They think it's important to be realistic about the scope of these measures.

The core affordability and inventory challenges have been building for more than a decade due to chronically underbuilt supply, rising development and infrastructure costs, and wage growth that hasn’t kept pace with housing costs. There is no single policy lever that can unwind those forces overnight.

The immediate measures may provide some slight relief, but true healing of the underlying issues will simply take time and require a longer-term commitment and view beyond our election cycles.

In the future, we can expect to see a continued focus on housing affordability, with potential solutions including changes to local zoning rules and increased attention to the impact of tariffs and immigration reform on housing construction.