Trump Admin's Housing Emergency Plan Coming This Fall

Should the federal government continue to meddle in the real estate market by manipulating it up and down?

It’s a question for all to ponder.

This weekend, Scott Bessent said, “We may declare a national housing emergency in the Fall… we are trying to figure out what we can do, and we don’t want to step into the business of states, counties, and municipal governments... I think everything is on the table.”

The reality is that the administration does see that there is a national real estate crisis.

Though, the crisis is actually an affordability crisis that is plaguing the next generation of home buyers, pushing up the median homebuyer age today to 56 years old. First time home buyer’s median age is now 38 years old — and high costs are preventing young people from starting families.

Costs keep going up, wages are becoming stagnant vs inflation, and the fear of AI continues to dominate narratives.

What can the government do to help the situation? Should they do anything at all?

Or should they simply let the market reset to reality, completely unmanipulated?

Imagine what the real estate market would look like if the Federal Reserve, for example, did not hold $2.1 trillion in MBS on their balance sheet?

Estimates show that mortgage rates would be at least 1% higher than they are now, if it were not for Fed intervention.

Keep in mind, for every 1% increase in mortgage rates, home values decrease by 8-12%.

What if the government didn’t have its FHA and VA loan workout programs that prevent foreclosures? Would prices come back to a spot where the average American could afford the American dream of homeownership?

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