The political imperative to fix America's housing shortage – record-high rents, burgeoning interest rates and high home prices – gained the immediate attention of the new President.
On the day he took office, President Trump signed an executive order telling all heads of executive departments and agencies “to deliver emergency price relief, consistent with applicable law, to the American people”.
It said: “Many Americans are unable to purchase homes due to historically high prices, in part due to regulatory requirements that alone account for 25% of the cost of constructing a new home according to recent analysis”.
It had no impact on the Federal Reserve, which responded within a few days by holding the interest rate steady in the 4.25-4.5% range rather than cutting further.
While our cash rate is 1% lower than its 2024 high of 5.5%, this reduction has resulted in only a moderate response in the real estate market. Home sales finished December strongly.
The Mortgage Bankers Association said in a statement it supported President Trump's focus on reducing housing red tape.
However, a lot of this red tape exists at a local level and remains beyond the reach of the Federal Government's “scissors”.
Nevertheless, there has been vocal support from the National Association of Home Builders' (NAHB) .
In a statement, its chairman said: “President Trump understands that America is facing a housing affordability crisis and the only way out of this crisis is to remove barriers like unnecessary and costly regulations that are raising housing costs and preventing builders from building more attainable, affordable housing.”
Meanwhile, the Trump administration has nominated a private equity professional, Bill Pulte, to lead the Federal Housing Finance Agency (FHFA).
The FHFA is charged with oversight of Fannie Mae and Freddie Mac – two mortgage companies created by Congress.
They provide liquidity to the thousands of banks, savings and loans, and mortgage companies that finance housing, ensuring ready access to funds on reasonable terms.
President Trump has previously questioned the need for their existence.
Navigating the ever-changing real estate landscape can be challenging. If you have questions about how these policy changes may impact buying or selling a home, feel free to reach out. We're here to help!
