, October 8, 2025
News Summary
The White House called on major government-controlled mortgage backers to encourage large homebuilders to accelerate construction, sparking questions about how that would work amid a softening housing market. Fannie Mae and Freddie Mac together guarantee a large share of U.S. mortgages, and any shift in their practices could affect construction finance. Experts say undeveloped lots often sit idle due to weak demand, higher building costs, labor shortages, zoning and permitting delays, and condo financing hurdles. Industry groups and regulators signaled attention, but no concrete programs were announced and analysts stress coordinated action is needed to boost supply.
President’s Call to Mortgage Firms Creates Confusion as U.S. Housing Market Slows
Top line
A social media post from the president urging the two major government-controlled mortgage firms to spur large homebuilders has prompted industry confusion amid an already sluggish housing market. The regulator for those firms signaled attention to the request, but it remains unclear what specific steps the mortgage firms could take to force or incentivize builders to start work on undeveloped lots.
Why this matters
The two mortgage firms together back or guarantee more than half of residential lending nationwide, giving them potential influence over mortgage standards and loan flow. Policymakers and housing experts say new construction is a key route to easing long-term affordability pressures, but current conditions — elevated construction costs, labor shortages, permitting hurdles and weak buyer demand in many areas — are slowing starts and discouraging builders from listing new inventory.
Immediate reaction and regulatory note
The federal regulator that oversees the mortgage firms publicly acknowledged the president’s post and indicated it was looking into the matter. Observers noted there is no clear mechanism in the regulator’s public remit to order builders to build or to compel lenders to change private development decisions. The idea raised questions about the lines between federal influence, private developer decision-making and market-driven constraints.
Market snapshot and trends
Analysts estimate the cumulative shortfall in housing built since the late 2000s amounts to several million units. One widely cited estimate put the national supply gap near 3.8 million homes in 2024, with the South region the most affected. At current construction rates, that shortfall would take multiple years to close.
Recent market indicators show mixed signs: median sales prices are still higher year-over-year, overall inventory has risen, and sales have declined modestly. Builders have been responding to weak demand by cutting prices and offering incentives. A notable portion of builders reported price reductions and increased use of sales incentives, while sentiment readings for builders have remained at historically low levels outside peak recovery periods.
Supply pipeline and construction activity
New housing starts have dropped sharply on a recent monthly basis, and a measure of homes for sale that have not yet begun construction crossed multi-decade highs, reflecting a backlog of lots or planned units that have not moved into active building. Experts point to higher input costs from recent tariffs and materials price moves, as well as a shortage of skilled construction labor and complex local permitting rules, as primary causes of stalled builds rather than a deliberate withholding of supply by builders.
Where mortgage firms might help
Observers and housing economists offered several ways the mortgage firms could potentially influence new construction: streamlining loan processing for construction and land development financing; easing approval pathways for condominium projects; and expanding or tailoring mortgage products to support offsite financing and presale requirements that often stall multifamily or condo projects. Whether builders would take up expanded financing options depends on broader market demand and construction economics.
Builders and trade association response
The national home builders’ trade group said increasing housing production requires close work with federal and state authorities to reduce regulatory barriers, address labor and materials shortages, and expand access to affordable financing. The trade group emphasized that removing permitting obstacles and reducing red tape are central to enabling more starts and completions.
Macro backdrop
Mortgage rates have shown slight improvement in recent weeks as markets have priced in the prospect of central bank policy easing. A commonly cited weekly average for 30-year fixed loans remained above long-run lows but fell modestly. At the same time, a temporary federal funding lapse limited access to updated labor market data, complicating near-term policy forecasts. Economists still expect policy easing steps later in the year, though outlooks depend on incoming employment and inflation data.
Privatization and policy context
The president’s broader agenda has included discussion of privatizing the government-controlled mortgage firms, a move that would alter their roles and potential tools. Talks with financial industry leaders on that topic have occurred previously. Any shift in ownership or mandate would require lengthy regulatory and legislative processes and would change how these firms could support housing production.
Bottom line
The call for the mortgage firms to prod large builders put financing and regulatory levers back in the spotlight but did not resolve how stalled lots would be turned into homes. Experts say boosting production will require coordinated action on financing, permitting reform and supply-chain and labor constraints, and that simple public encouragement will not by itself overcome the economic and regulatory hurdles facing homebuilders.
Frequently Asked Questions
What was requested and who was asked to act?
The president asked the two major government-controlled mortgage-backed firms to spur large homebuilders to build more homes. The request came via a public social media post and drew attention from the regulator that oversees those firms.
Can the mortgage firms force builders to build?
No direct authority exists for the mortgage firms to force private builders to build. They can, however, adjust financing programs, loan-processing practices and product offerings that may encourage construction activity if such changes fall within their legal mandates.
Why are lots not being developed now?
Experts point to weak buyer demand in some markets, higher construction costs due to tariffs and material prices, shortages of skilled labor, and lengthy local permitting and zoning processes as main reasons many lots remain undeveloped.
How large is the housing supply gap?
Recent estimates place the national supply gap at several million homes, with significant regional variation. Closing that gap at current building rates would take multiple years.
Could policy changes speed up building?
Targeted policy changes — such as easing permitting rules, expanding construction financing, and addressing material and labor constraints — could help, but they typically require federal, state, and local coordination and time to implement.
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Key facts and figures
| Item | Figure / Detail |
|---|---|
| Mortgage market share | Two government-controlled firms together guarantee or back over half of U.S. residential mortgages |
| Estimated housing supply gap | Roughly 3.8 million homes (estimate cited for 2024) |
| Regional gap example | South region estimated shortfall of about 1.15 million homes |
| Time to close gap | Approximately 7.5 years at current construction rates (estimate) |
| Median home price (recent month) | $439,278 (up modestly year-over-year) |
| Inventory | About 2.1 million listings, up over 10% year-over-year |
| Home sales trend | Sales down around 2% year-over-year |
| New listings by builders | New homes listed down roughly 6.7% |
| Builder price moves | About 39% reported cutting prices in a recent month; average cut roughly 5% |
| Housing starts (recent monthly change) | Starts plunged 8.5% to an annualized rate near 1.307 million |
| Mortgage rate (30-year average) | Approximately 6.34% for a recent weekly period |
| Policy timing | Central bank announcement scheduled later in the month; economic data flow being watched closely |
Deeper Dive: News & Info About This Topic
Additional Resources
- Reuters: Trump calls on Fannie Mae, Freddie Mac to get big homebuilders going
- Wikipedia: Fannie Mae
- Bloomberg: Trump call for Fannie, Freddie to spur building is a mystery
- Google Search: Trump Fannie Freddie spur building
- U.S. News: Trump calls on Fannie Mae and Freddie Mac to get big homebuilders going
- Encyclopedia Britannica: Fannie Mae
- Investing.com: Trump yet to decide on Fannie Mae, Freddie Mac IPO — Pulte says
- Google Scholar: housing supply Fannie Freddie 2025
- Newsweek: Donald Trump housing update
- Google News: Trump Fannie Mae Freddie Mac homebuilders
Author: Construction TX News
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