President Donald Trump is making a bold move: he is publicly urging Fannie Mae and Freddie Mac to push large homebuilders into action and help “restore the American Dream.” This comes amid concerns about a housing shortage and many empty lots sitting unused across the country.
Let me break this down so you understand what he wants, the challenges that lie ahead, and what it could mean for you.
What exactly did Trump say?
In a recent post on Truth Social, Trump claimed homebuilders are “sitting on 2 million empty lots, a record.” He said, “They’re my friends, and they’re very important to the SUCCESS of our Country, but now, they can get Financing, and they have to start building Homes.”
His call is for the mortgage finance entities to encourage and finance big builders to start construction on these vacant lots. Trump believes that if builders act fast, it could help lower housing costs and make homeownership more achievable for more Americans.
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What are Fannie Mae and Freddie Mac’s roles in housing?
To understand whether Trump’s request makes sense, you first need to know what Fannie Mae and Freddie Mac do. These two organizations are government-sponsored enterprises (GSEs) that help to stabilize the U.S. housing market. They do this by buying mortgage loans from banks and other lenders, then turning those loans into securities that investors can purchase.
So, Trump’s proposal would mean they might need to take on new roles like offering easier financing options, supporting construction loans, or creating programs that reward builders for developing unused land.
Why are homebuilders holding back?
They may be holding back because of the following reasons:
- There are many unsold homes.
- High costs of borrowing: Interest rates are still high, making construction loans and mortgages expensive.
- Regulatory delays: Zoning laws, permit requirements, and other local rules often slow down building timelines.
- Uncertain demand: Home prices are still high, and a lot of buyers are cautious, so builders do not want to take on too much risk.
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Trump’s influence over housing policy
Trump has expressed his interest in housing since the start of his administration. His team has focused on making homes more affordable and easing the pressure on the market. He also appointed Bill Pulte as the director of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac. This move gives the administration an edge and allows them to have more control over housing policy decisions.
Trump’s long-term goal has been to privatize Fannie and Freddie, giving them more flexibility and independence from federal oversight. If that happens, they might have more room to support builders in new ways.
What could this mean for the housing market?
If Trump’s plan works and more homes are built, the housing market will be relieved. More supply will help reduce housing prices and give buyers more options.
Still, experts warn that this plan could take time to show results. Building new homes is not quick — it requires land preparation, permits, and construction. Also, if too many homes flood the market too quickly, it could drive prices down sharply, hurting builders’ profits.
For now, the housing industry is watching closely to see whether Trump’s push for Fannie Mae and Freddie Mac will actually turn into new policies—or just remain a strong public message to homebuilders.
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