Trump pledges to make housing affordable while keeping values up
President Donald Trump said his administration plans to make housing more affordable for new homebuyers while keeping home values high for existing homeowners.
Trump delivered his State of the Union address to a joint session of Congress on Tuesday night and touted the lower cost of new mortgages since he took office in January 2025.
"Mortgage rates are the lowest in four years and falling fast, and the annual cost of a typical new mortgage is down almost $5,000 just since I took office. One year," Trump said.
"Low interest rates will solve the Biden-created housing problem while at the same time protecting the values of those people who already own a house that really feel rich for the first time in their lives. We want to protect those values; we want to keep those values up. We are going to do both. And we are going to keep it that way," the president added.
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Data from Freddie Mac shows that the average rate on a 30-year fixed mortgage declined from 7.04% in January 2025, when Trump began his second term, to the current 6.01%.
While lower interest rates can help with the affordability of mortgages taken out by new homeowners, they have an inverse relationship with home prices, as lower rates stimulate demand among prospective buyers, which pushes home values higher.
That dynamic can counteract the affordability improvements from lower mortgage rates by increasing the size of the mortgage, as both elements factor into the owner's monthly payments.
Investors have noted that the most effective way to lower home prices would be to expand the supply of homes, though they cautioned that most of the laws and regulations are governed at the state and local level, which gives the federal government few options.
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Trump also discussed his plan to ban institutional investors from buying large numbers of homes, citing the experience of a State of the Union guest who he said was outbid for 20 homes by "gigantic investment firms that bypassed inspection. Paid all cash and turned those houses into rentals, stealing away her American dream."
The president said that stories like those prompted his executive order banning large investment firms from buying homes and called on Congress to make the ban permanent, adding that, "We want homes for people, not for corporations."
Trump's order directs federal regulators to promote home sales to individuals and to issue guidance preventing federal programs from facilitating single-family home sales to Wall Street investors. The order also mandates antitrust scrutiny of institutional home purchases and calls on Congress to codify the changes into law.
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Jake Krimmel, senior economist at Realtor.com, said of the move that, "In particular, large institutional investors represent a relatively small share of the national housing stock, and because their activity is often highly localized, it remains an open question whether banning new purchases would meaningfully shift metro-level markets."
National Association of Home Builders CEO Jim Tobin said that his organization has been engaged with the administration to push policies that could help lower the cost of building new homes, adding that "corporate investment in housing has been a driver of new home construction."
Wall Street firms including Blackstone, American Homes 4 Rent and Progress Residential have bought thousands of homes since the 2008 financial crisis prompted a wave of foreclosures. Firms owned about 3% of all single-family rental homes by June 2022, government data showed.
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Those firms dispute that their investments have stoked inflation in housing prices, with Blackstone noting it has been a net seller of homes for the last decade.
Reuters contributed to this report.