Trump Unveils Housing Plan with Lower Rates, Blocks Investors From Homes/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ At Davos, President Trump announced a bold plan to tackle housing affordability, calling for lower interest rates and a ban on institutional investors buying single-family homes. He also proposed capping credit card interest and using federal mortgage bond purchases to ease loan rates. The move reflects growing pressure to address affordability ahead of midterms.
Trump’s Housing Reform Plans: Quick Looks
- Lower Interest Rates Push: Trump wants mortgage and credit card interest rates slashed.
- Fed Shake-Up: A new Federal Reserve chair will be named soon.
- $200 Billion Mortgage Bond Buy: Plan aims to ease mortgage rates.
- Investor Ban Proposal: Trump seeks to block big firms from buying single-family homes.
- Legislative Push on Credit Cards: Proposes 10% interest cap for one year.
- Executive Order Signed: Reviews legality of corporate home purchases.
- Renters vs. Buyers Debate: Trump says homes should be for people, not corporations.
- New Ideas Pending: White House considers 401(k) down payment access.
- Impact Unclear: Economists question how much the policies will move the market.
Trump Unveils Housing Plan with Lower Rates, Blocks Investors From Homes: Deep Look
At the World Economic Forum in Davos, President Donald Trump turned his attention to the American housing crisis, laying out a multi-pronged plan aimed at making homeownership more affordable for working families. The centerpiece of his speech was a pledge to lower interest rates and eliminate corporate competition in the housing market — both of which, he argued, are essential to reversing the nation’s home affordability crunch.
Mortgage and Credit Rates in Trump’s Crosshairs
Trump said he is instructing his administration to push for lower interest rates across the board — including on mortgages and credit cards — to give prospective homeowners greater financial breathing room.
“We can drop interest rates to a level… That’s natural. That’s good for everybody,” Trump said.
To jumpstart the effort, Trump announced that the federal government will purchase $200 billion in mortgage bonds using funds from Fannie Mae and Freddie Mac. This move is designed to exert downward pressure on mortgage rates. However, many economists remain skeptical of its long-term effectiveness.
Recent data shows that the average 30-year mortgage rate has fallen to 6.06%, its lowest in over three years. But rates had spiked above 7% just months earlier, highlighting how unpredictable borrowing costs remain — even when the Federal Reserve cuts its benchmark rate.
New Fed Leadership Coming
Trump reiterated that he will soon nominate a new Federal Reserve chair to replace Jerome Powell, whose term ends in May. The move signals a broader overhaul of U.S. monetary policy leadership in line with Trump’s push for aggressive rate reductions.
“I think they’ll do a very good job,” Trump said of his unnamed pick.
Still, past Fed rate cuts haven’t always led to cheaper mortgages, as broader market forces — such as the 10-year Treasury yield — also play a key role in setting home loan rates.
Ban on Institutional Investors in Housing
Perhaps the most controversial part of Trump’s housing plan is his proposed ban on large institutional investors from purchasing single-family homes. He cited growing concerns that ordinary Americans are being outbid by corporations in an already competitive market.
“Homes are built for people, not for corporations,” Trump said. “America will not become a nation of renters.”
Trump signed an executive order Tuesday directing federal agencies to review whether corporate real estate practices are anti-competitive. The order includes several new provisions:
- https://newsroom.ap.org/homeBlocks government-backed housing agencies from supporting investor purchases.
- Requires regular homebuyers be given first dibs on foreclosed homes.
- Exempts companies that build homes for rent from the restrictions.
Still, details remain unclear. The administration has yet to define what constitutes a “large institutional investor,” and data shows most rental homes are owned by small landlords — not giant hedge funds.
“It probably won’t make a noticeable impact on the housing market,” said Daryl Fairweather, chief economist at Redfin.
Credit Card Interest Cap Proposal
To help Americans save for down payments, Trump also proposed a one-year cap on credit card interest rates, limiting them to 10%. While he previously asked issuers to adopt the cap voluntarily, he is now calling on Congress to make it law.
Currently, the average credit card interest rate is around 21%, according to the Federal Reserve Bank of New York — more than double the proposed cap.
Future Plans: Tapping 401(k)s for Down Payments
Kevin Hassett, Director of Trump’s National Economic Council, told Bloomberg that the president was “foreshadowing” bigger policy moves. Among them: allowing Americans to tap into their 401(k) retirement accounts to fund home down payments.
The White House has yet to release official guidelines, but insiders suggest the idea could gain traction as part of a broader effort to improve housing access without increasing government spending.
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