Trump says the administration will lower housing costs, keeping home prices from rising
Corcoran Group broker Noble Black joins Varney & Co. to discuss homebuilder confidence, mortgage rates and Congressional actions to address the housing crisis.
The president Donald Trump he said his administration plans to make housing more affordable for new buyers while keeping home prices high for existing homeowners.
Trump introduced his own State of the Union His speech to a joint session of Congress on Tuesday night also highlighted the lowest cost of new housing since he took office in January 2025.
“Mortgage rates are the lowest they’ve been in four years and they’re falling fast, and the annual cost of a new typical mortgage has dropped by about $5,000 since I took office. In one year,” Trump said.
“Low interest rates will solve the problem of housing created by Biden while at the same time protecting the values of those people who already own a house who feel really rich for the first time in their lives. We want to protect those values; we want to keep those high values. We will do both. And we will keep it that way,” added the president.
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President Donald Trump expressed the decrease in mortgage rates since he took office during his State of the Union address. (Kent Nishimura/Reuters)
Data from Freddie Mac shows that the average 30-year mortgage rate has fallen from 7.04% in January 2025, when Trump begins his second term, to 6.01% now.
Although low interest rates can help in accessing loans taken by new home ownersthey have an inverse relationship with home prices, as lower prices stimulate demand among prospective buyers, which pushes home prices higher.
That flexibility can counter affordability improvements from lower mortgage rates by increasing the size of the loan, as both factors factor into the owner’s monthly payments.
Investors noted that the most effective way to lower housing prices would be to increase housing supply, although they cautioned that most laws and regulations are controlled at the state and local level, giving the federal government few options.
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Investors say that increasing the housing supply is the best way to make home ownership more affordable for Americans. (Joshua Lott/Bloomberg via Getty Images)
Trump also discussed his plan to prevent institutional investors from buying more houses, citing the experience of a State of the Union visitor who said 20 houses were foreclosed on by “big investment firms that didn’t get vetted. He paid all the money and turned those houses into rental properties, they stole the American dream.”
The president said stories like these prompted his executive order to block big investment firms from buying homes and asked Congress to make the ban permanent, adding, “We want people’s homes, not corporate ones.”
Trump’s order directs federal regulators promoting the sale of homes to individuals and issuing guidance prohibiting government programs from assisting the sale of single-family homes to Wall Street investors. The order also authorizes the review of institutional housing purchases and calls on Congress to codify the changes into law.
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Lower interest rates bring more buyers into the market, which can drive home prices higher. (Andrew Burton/Getty Images)
Jake Krimmel, senior economist at Realtor.comsaid the move, “In particular, large institutional investors represent a small part of the country’s housing, and because their work is often done locally, it is still an open question whether banning new purchases will meaningfully change metro-level markets.”
The CEO of the National Association of Home Builders, Jim Tobin, said his organization is working with the administration to push policies that will help reduce costs. building new homesadding that “corporate investment in housing has been a driver of new housing.”
Wall Street firms including Blackstone, America’s 4 Rent and Progress Residential have it he bought thousands of houses since 2008 the financial crisis caused 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 companies argue that their investments have fueled inflation in home prices, while Blackstone notes that it has been selling real estate for the past decade.
Reuters contributed to this report.
