Daniel Wolfram
A new White House order directs federal agencies to slash loan costs and eliminate regulations as mortgage rates reach 7 percent.
President Donald Trump signed an executive order on Thursday. It aims to lower mortgage payments and jump-start the housing market.
A major part of the plan involves cutting red tape for government-backed mortgages.
Trump told Bill Pulte, the director of the Federal Housing Finance Agency, to test out canceling certain insurance premiums once a homeowner builds enough equity.
The White House explained the reasoning. They stated, “Homeownership is a vital pillar of our great Nation, and President Trump and his Administration are working tirelessly to cut burdensome costs and red tape to make the American dream of homeownership more affordable for all Americans.”
Sky-high interest rates
The timing makes sense on two separate levels. The interest rate recently surged past 7 percent for a 30-year loan. It is also a last push to gain ground on the Democrats before the midterm elections in just under two weeks.
The war in Iran, rising oil prices, and climbing bond yields make loans far more expensive.
The National Association of Realtors reported that pending home sales plummeted by 11.3 percent compared to last year.
Helping the housing market
Experts see the exact same problem. Dr. Lawrence Yun, chief economist for the National Association of Realtors, pointed directly to the root cause.
He noted to The Hill, “Market conditions weakened in September due to fast-rising mortgage rates.”
With the executive order, Trump has directed the Agriculture and Veterans Affairs departments to lower interest rates pertaining to loans for single-family homes. A pilot program waiving title insurance will also become permanent.
Support for Trump’s executive order
Supporters quickly cheered the announcement. Pulte celebrated the move on social media.
He wrote, “Because of President Trump’s bold actions to put Americans First, millions of Americans will save thousands and thousands of dollars.”
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Industry leaders backed the move. Shannon McGahn, an executive at the National Association of Realtors, praised the effort.
She said the order helps “address the costs associated with homeownership” and “takes steps toward making homeownership more sustainable” for buyers.
