US President Donald Trump on Thursday signed an executive order aimed at bringing down the cost of owning a home in America, the White House said in a statement — a direct response to growing voter frustration over high mortgage rates and unaffordable housing ahead of November's midterm elections.
The order targets single-family homeownership costs through a package of moves aimed at mortgage insurers, refinancers and government-backed home loans. The Federal Housing Finance Agency (FHFA) has been told to launch a pilot program that would proactively cancel borrowers' mortgage insurance premiums once they meet their equity requirements based on the current market value of their home. According to the White House, that would "eliminate a large monthly expense for qualifying Americans across the country."
The order also makes permanent an FHFA pilot program that waives title insurance on mortgage refinancings, cutting the closing costs borrowers pay when they refinance. In addition, it creates a Task Force on Manufactured Housing Innovation — co-chaired by the Housing and Urban Development Secretary and the FHFA director — to expand factory-built housing eligible for federal housing programs by applying modern manufacturing methods to home construction.
Finally, the order directs the Secretaries of Agriculture and Veterans Affairs to reduce interest rates on single-family home loans issued by their departments, a move aimed at rural and military borrowers who finance through those programs.
The action lands at a moment of acute strain in the housing market. The average 30-year fixed mortgage rate climbed to 7.40% last week — the highest in about three years — before easing to 7.32% this week, according to Freddie Mac. Contracts to buy previously owned US homes plunged to a record low in September as rising borrowing costs squeezed demand, the National Association of Realtors reported, while single-family housing starts fell 4.6% and permits for future construction dropped to their lowest level in three and a half years.
It is worth noting what the order does not do: most of the measures lower costs only after a borrower has built up enough equity, or when refinancing — they do not immediately make a new home purchase cheaper. Housing affordability has become a political weak spot for Republicans with the midterms approaching, and the White House framed the order as part of a broader push to cut costs and red tape around homeownership.
Sources: Reuters; The White House.
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