Trump urges Fannie Mae, Freddie Mac to boost homebuilding

President Donald Trump called on Fannie Mae and Freddie Mac to spur more homebuilding in a post on Truth Social on Sunday.

“Before I became President, “OPEC” kept Oil prices high. It wasn’t right for them to do that but, in a different form, is being done again — This time by the Big Homebuilders of our Nation. 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. They’re sitting on 2 Million empty lots, A RECORD. I’m asking Fannie Mae and Freddie Mac to get Big Homebuilders going and, by so doing, help restore the American Dream!”

It’s not clear how Fannie and Freddie might create more incentive for homebuilders. The two government sponsored enterprises buy loans from mortgage lenders to ensure liquidity in the market and repackage those into investment products. They also set the standards for creditworthiness and ability to repay for mortgage loans. While they offer several construction products, those support lenders and homebuyers, not builders.

HousingWire Lead Analyst Logan Mohtashami has written extensively on what could trigger more homebuilding and weighed in on Trump’s statement. “The builders’ completed units for sale is simply too high for them to start issuing new permits. The best thing Trump and Pulte could do is get lower rates — the rest will take care of itself.” Mohtashami also talked about this subject on CNBC last month.

Housing inventory reached a historic low in 2022 but has risen this year to give buyers more choices. HousingWire’s latest Housing Market Tracker, which uses weekly data, shows national inventory for existing homes rose to 863,972 homes last week. The latest inventory of new homes, released by the Census Bureau on Sept. 24, showed 490,000 new houses for sale at the end of August. This is 1.4% below July estimates and 4% above August 2024 numbers.

As Mohtashami wrote after the Census numbers came out for August: “The builders have seen a significant drop in the monthly supply from recent highs this year, which some would say is beneficial, as it now allows them to build more homes. However, the builders still have a substantial number of completed units for sale and homes that they haven’t started construction on yet, so I wouldn’t be cheering the monthly supply drop story yet. Completed units for sale are still over 120,000 — a number that for decades has been a red flag for the builders and usually means permits are declining.”

Trump has put housing at the top of his priority list since taking office, issuing an executive order for emergency price relief for housing on inauguration day. Since then he has run a pressure campaign against Federal Reserve Chair Jerome Powell to reduce interest rates or be fired/resign, and looked to replace voting members of the Federal Reserve Board by launching investigations into individual members.

Regarding Fannie and Freddie, FHFA Director Bill Pulte, at Trump’s direction, has made sweeping changes to the GSEs’ boards, fired top execs and cut staff. Pulte has also implemented VantageScore 4.0 and spearheaded the GSEs’ acceptance of crypto-backed mortgages.

Trump wants to release Fannie and Freddie from conservatorship, something he initiated but was not able to accomplish in his first term. He has been setting the stage since May, and ramped up speculation in July when he met privately with big banks about the topic.

Read all of Trump’s actions related to housing in this continuously updated article.