FHFA director Bill Pulte on Trump's housing affordability push
Speakers
Bill Pulte
— Director of the Federal Housing Finance Agency
Summary
Bill Pulte, director of the Federal Housing Finance Agency, discusses the Trump administration's housing affordability push, including a directive for Fannie Mae and Freddie Mac to buy $200 billion in mortgage bonds. He says the purchases have begun and have helped push mortgage rates below 6%. Pulte also says he expects a ban on institutional investors buying homes and that Fannie Mae and Freddie Mac are being run like businesses, with IPO talk not mutually exclusive.
- Mortgage rates fell below 6% after the housing announcement.
- FHFA director Bill Pulte says the GSEs will purchase $200 billion of mortgage bonds.
- Pulte says execution has begun and mortgage underwriting standards are strong.
- Pulte expects a ban on institutional investors buying homes.
- He says housing prices can stay high while affordability improves.
- Fannie Mae and Freddie Mac are being run like businesses.
- A public offering for the GSEs is not ruled out.
- More housing policy announcements are expected at Davos.
Ideas
Buy MBS; GSE purchases support
Pulte says Fannie Mae and Freddie Mac are deploying $200 billion into mortgage bonds and have already begun executing. He argues these mortgage securities yield attractive returns, underwriting standards are safe and sound, and the buying is intended to lower mortgage rates.
Housing prices stay high; affordability improves
Pulte says lower mortgage rates, now in the high-5% range, combined with a likely ban on institutional investors buying homes, will keep housing prices high while making housing more affordable. He calls this a big one-two punch for the housing market.
Fannie, Freddie IPO optionality remains alive
Pulte says Fannie Mae and Freddie Mac are being run like businesses and benefit from the higher-yielding mortgage securities they are buying. He also says the current policy role and a potential public offering are not mutually exclusive, keeping IPO/privatization optionality in view.
