President Trump yesterday issued an executive order, “Decreasing Housing Costs For The American People,” directing the Federal Housing Finance Agency to use its authority over Fannie Mae and Freddie Mac to lower mortgage-insurance and refinance closing costs through automated tools, while establishing a task force to expand factory-built housing and instructing the Departments of Agriculture and Veterans Affairs to reduce rates on certain direct loans. In a new insight, Director of Financial Services Policy Thomas Kingsley provides a breakdown of the executive order.

He concludes:

Any good-faith attempt to lower mortgage-insurance premiums, refinance closing costs, and barriers to factory-built housing is to be celebrated, but the real test is whether these measures deliver meaningful savings without increasing taxpayer exposure. The directive remains focused on making housing transactions cheaper rather than addressing the underlying shortage of homes. And while the GSEs may be useful tools for reducing certain costs, they should not become the federal government’s answer to every housing-market problem. Lasting affordability will require more homes, fewer barriers to construction, and greater room for private competition—not another expansion of federal involvement in a market already struggling under the weight of its own constraints.

Read the analysis.