On his first day in office, President Donald Trump issued a memorandum emphasizing his administration’s focus on reducing the cost of goods and services, including housing.
The executive order, released Monday, called for efforts to lower housing costs and increase housing supply.
The president pointed out that historically high prices, which prevented many from purchasing a home, were linked to regulatory requirements that “account for 25% of the cost of constructing a new home.”
“Unprecedented regulatory oppression” has raised costs for the average American family, with expenses reportedly exceeding $50,000 per household, the executive order reads.
“It is critical to restore purchasing power to the American family and improve our quality of life,” the document states. “Hardworking families today are overwhelmed by the cost of fuel, food, housing, automobiles, medical care, utilities, and insurance.”
The memorandum did not mention home insurance, despite ongoing concern regarding its increase in price, especially in areas that are prone to natural disasters.
Trump ordered the heads of all executive departments and agencies to deliver emergency price relief to the American people, though how they may do so remains to be seen.
The Community Home Lenders of America and the Mortgage Bankers Association responded to the order by offering suggestions for how the administration could cut housing-related costs.
“The biggest impact would be bringing down long-term mortgage rates but the [Consumer Financial Protection Bureau] can also help through regulatory streamlining for smaller independent mortgage ballers and reining in third party provider mortgage closing costs like credit report and FICO credit score fees,” said Scott Olson, executive director of CHLA.
Olson added that the Federal Reserve’s move to stop buying mortgages contributed to long term mortgage interest rates growing from 40 to 80 basis points over historical spreads, leaving “a lot of room for improvement, which could have a big impact on the cost of buying a new home.”
Bob Broesmit, CEO of the Mortgage Bankers Association, said he was happy to see housing supply and affordability being included in the executive order and reiterated the need for the Federal Housing Administration to throw out its life-of-loan premium requirement and cut mortgage insurance premiums.
“We support efforts to cut unnecessary regulatory red tape,” Broeksmit wrote in a statement Tuesday. “This includes our strong belief that the Federal Housing Administration should eliminate its life of loan premium requirement and strongly consider a reasonable reduction to FHA mortgage insurance premium levels to reduce housing costs for low- to moderate-income Americans.”
