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homeownership
Report Urges US Government Relief for Homebuyers as Costs Spin ‘Out of Control’
"Buying a home has never been less affordable. Trump has made it worse."
Dec 17, 2025
With mortgage rates climbing and the median income a family needs to afford a home ballooning by nearly 50% in just the past five years, the advocacy group Groundwork Collaborative on Wednesday called on the federal government to take targeted, concrete actions to reverse the affordability crisis that President Donald Trump's policies are only making worse.
Groundwork's senior adviser for economic policy, Emily DiVito, joined former deputy director of the National Economic Council Bharat Ramamurti to release a report titled Unraveling the Mortgage Maze: How Government Can Make Homeownership More Affordable for American Families. The paper emphasizes that "at a time when American families are struggling with a severe housing affordability crisis, relief for overburdened consumers requires the federal government to reshape and strengthen its role in the mortgage financing system."
Because interest rates have been elevated since 2022, homeowners are "locked in" to their existing mortgages, with many young families feeling stuck in their "starter homes" even as they outgrow them. In addition to the impact on families, the "lock-in effect" is suppressing turnover, reducing supply, and contributing to more expensive houses.
Those consequences "ripple across generations and regions," wrote DiVito and Ramamurti in the report. "Today, younger families disproportionately confront a market in which suitable homes are scarce, mobility is costly, and the financial advantages once associated with homeownership are increasingly out of reach."
While the federal government intervened during the Great Depression and established new housing agencies and mortgage financing programs, homebuyers now have to contend with a "hybrid" system, with the government providing liquidity for financial firms and consumers relying on private loan services, lenders, and brokers to find an affordable mortgage and navigate the purchasing process.
Reducing home prices was part of the platform Trump campaigned on, but as with his tariffs' impact on grocery prices and the effect on electricity bills that his aggressive push for artificial intelligence expansion is having, the president's proposals would make the housing affordability crisis worse, DiVito and Ramamurti explained.
Trump and his Federal Housing Finance Agency (FHFA) director, Bill Pulte, "impulsively introduced a 50-year mortgage proposal in early November 2025 that would lower a family’s monthly payment on a median-priced home by less than $120, while saddling homeowners with higher interest rates and a slower path to equity," reads the report.
The administration is also working to privatize government-sponsored entities, which would raise mortgage rates and restrict credit "while generating huge windfalls for hedge funds and billionaires."
No other detailed proposals have been released by the White House for reducing costs for homebuyers, according to DiVito and Ramamurti.
The report offers four proposals that would provide families with "material relief":
- Cutting mortgage insurance premiums on millions of government-backed mortgages, which would save families hundreds of dollars per year and thousands over the life of their loans;
- Allowing families to keep their mortgage rate when they sell one home and buy another to help alleviate the lock-in effect that grinds the market to a halt, saving families more than $5,000 per year on mortgage costs;
- Offering low-rate direct federal loans so that consumers can benefit from the government’s low cost of borrowing; and
- Creating transparent pricing platforms so that consumers can better navigate these complicated markets with greater ease and efficiency.
The report points to the millions of homebuyers who are required to take out mortgage insurance each year—a transaction that adds thousands of dollars to their yearly housing payments while protecting their lender, not them.
Without congressional action, says the report, the Trump administration could lower the rate at which the mortgage insurance premium (MIP) is charged to borrowers—a step the federal government has taken before, as recently as 2023 when it saved an average of $453 annually for 1.1 million borrowers.
The government could also shorten the lifetime of MIP payments by requiring automatic termination earlier than currently required:
If a borrower puts down less than 10% on government-backed loans, the MIP will be assessed for the lifetime of the loan or until the borrower can refinance. If a borrower puts down more than 10%, MIP payments are automatically canceled after 11 years. [Private mortgage insurance] on the other hand, is supposed to be canceled automatically at 78% [loan-to-value], and borrowers can request early cancellation at 80%. However, many borrowers report that servicers fail to terminate their payments when they hit the threshold. Policymakers can amend Section 4902 of the Homeowners Protection Act (12 U.S. Code § 4902) to enable earlier cancellation of PMI, which is enforced by the [Consumer Financial Protection Bureau].
Policymakers can also expand offerings for mobile mortgages, "an underutilized home loan product that could deliver thousands in cost savings to homeowners each year." Allowing buyers to assume the existing rate of a seller or bring their current rate with them to their new home would alleviate the lock-in effect, "freeing up existing housing supply and making it easier for families to move affordably and when they want—no matter the interest rate environment."
Mobilizing a mobile mortgage could save a family up to $5,078 annually, and with Baby Boomers owning 28% of the nation's largest homes, "more affordable and flexible mortgage financing could free up millions of existing homes for younger buyers or large families," wrote DiVito and Ramamurti.
Government-provided direct loans at the cost of borrowing is named in the report as "the most direct role" the Trump administration could take in the mortgage market.
"Doing so would extend the benefits of the government’s cheaper financing directly to consumers," reads the report. "To ensure that the program targets the low- and middle-income homeowners who are most likely to need and benefit from cheaper financing, awards could be pegged to the median purchase price of single-family homes in any given area. Income and credit thresholds could also be established, as they already are for government-backed mortgages, to allow for more efficient underwriting."
Policymakers could also create a centralized online platform listing all mortgage lenders' terms, fees, eligibility requirements, and customer service information, bringing "closely held industry information out of the shadows, [and] equipping consumers with the knowledge necessary to navigate the mortgage market successfully."
The CFPB found that 30% of borrowers do not comparison-shop for their mortgage and more than 75% apply for a mortgage at just one lender—costing the average homebuyer about $300 per year.
Making a centralized database available to borrowers would stop lenders from colluding on mortgage rates as Wells Fargo, Rocket Mortgage, and JPMorgan Chase have been accused of doing in a recent class action lawsuit.
"By leveraging the government’s unique financing power and regulatory authority to craft a mortgage system that is simpler, less costly, and more responsive to households’ needs," wrote DiVito and Ramamurti, "millions of families who feel buying a home is out of reach may finally be able to achieve and maintain homeownership."
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Property Insurance Is the Canary in the Climate Coal Mine
We too have a little bird trying to call our attention to a major problem. That bird is the insurance industry with its army of actuaries.
Nov 18, 2025
As the cost of insuring our houses escalates around the United States and the world, it appears that property insurance is acting like a canary in a coal mine.
Canaries used to be taken into coal mines because they served as an early warning system if dangerous gases were building up. Since the canaries were more sensitive to these gases than people, they protected the miners from life-threatening conditions. When the canary dropped dead, the miners could still get out.
Like the canaries, the actuaries who interpret data for insurance companies are more sensitive than most individual people to changes going on in the world. Actuaries earn big salaries because the financial health of their employers depends on them.
Things have already gotten so bad that the National Academies of Sciences, Engineering, and Medicine (NASEM) recently sponsored a webinar panel discussion: "Extreme Weather Events and Insurance: Households, Homeowners, and Risk." (This link will take you to a video of the event.)
Any coal miner who refused to evacuate a mine when the mine’s canary keeled over—perhaps saying, “I don’t believe there is any real danger here”—would not have been long for this world.
The panelists were located in the United States (Washington, DC and Madison, Wisconsin) and England (London and Cambridge). Climate changes are not limited to the United States, nor is awareness that we need to do something about them if we can.
The panelists were not grinding particular political axes. They were discussing the measured fact that an increasing number of extreme weather events are destroying valuable property—housing, commercial buildings, streets, bridges, etc.—requiring insurance company payouts to policyholders.
These insurance payouts must be financed by the premiums charged to people who are insuring their property. As damages increase, the premiums also have to increase. Although premiums may be regulated by state regulators, if they do not allow the needed increases insurance companies will pull out of doing business in that state.
As insurance companies pull out, it may become more and more difficult—perhaps even impossible—for people to insure their houses. But if a house cannot be insured, banks won’t finance a mortgage on it, and if it cannot be financed the owner may be unable to sell it.
For many people, their home is their primary investment, and they cannot afford to live in it if they cannot insure it. If it burned down or was otherwise destroyed, they would be wiped out financially. But if they cannot sell it, then the homeowner is a real pickle.
Disrupted housing markets can produce disastrous results for a country’s economy in general, as we Americans discovered during the recession beginning around 2008.
The impact of a world that is heating up is not being felt as much in the United States as in many other countries in Europe, Africa, and Asia which are suffering from unusually long bouts of very hot weather, flooding downpours alternating with extreme droughts, forest fires, etc. Some island nations may be literally wiped out as melting icebergs and glaciers increase sea level, putting them underwater.
But enough extreme weather events are already occurring in the United States that the insurance companies must make major increases in their prices.
Any coal miner who refused to evacuate a mine when the mine’s canary keeled over—perhaps saying, “I don’t believe there is any real danger here”—would not have been long for this world.
Americans who continue to politicize discussion of global warming—either denying its existence, its extent, its speed, or its seriousness—will be like that coal miner. We too have a little bird trying to call our attention to a major problem. That bird is the insurance industry with its army of actuaries. We ignore that warning at our own risk, and at the risk of our children and grandchildren.
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Privatizing Freddie and Fannie Is Another Trump Scheme to Make the Rich Richer
The basic story here is that in order to give donors in the financial industry still more money, Trump is planning to privatize a perfectly well-functioning public system for securitizing mortgages.
Aug 13, 2025
In Washington no bad idea stays dead long. Therefore it should not be surprising that U.S. President Donald Trump is planning to move forward with plans to privatize Fannie Mae and Freddie Mac, the mortgage giants that have been in government conservatorship for almost two decades.
As with many of the moves undertaken by Trump, it is not clear what problem this is meant to solve. For the period they have been in conservatorship, Fannie and Freddie have been securitizing mortgages at a low cost and have not faced any substantial management problems.
There is of course one problem that privatizing Fannie and Freddie would solve. This is yet one more way that the financial industry can run up some profits and high pay for top executives at the expense of the rest of us.
The Congressional Budget Office calculated that having private institutions, rather than Fannie and Freddie in their current form, would add roughly 20 basis points, 0.2% to the cost of securitizing mortgages. With around $1 trillion in mortgages being securitized each year, that comes to $2 billion annually. That is not huge in the context of the federal budget (0.03%), but it is four times the annual appropriation for the Corporation for Public Broadcasting that got Trump so upset.
Trump is giving a green light to his finance buddies to find every more creative ways to rip off businesses and ordinary people.
And in the case of privatizing Fannie and Freddie, we literally get nothing for it except a less efficient mechanism for securitizing mortgages. This is similar to the plans for privatizing Social Security. We have an extremely efficient public system, but many people in the Trump administration see the opportunity to make trillions of dollars in fees by turning it into a private system.
As with a privatized Social Security system, we would also be exposing ourselves to needless risk by privatizing Fannie and Freddie. The basic problem is that we would be allowing a private corporation to operate with a government guarantee against losses. This guarantee gives a private securitizer an enormous incentive to securitize bad mortgages in order to increase volume and make more profits. That was the story of the housing bubble and the subsequent collapse and financial crisis in 2008-09.
If a private securitizer is carefully regulated, it can limit the risk of reckless lending. But does anyone believe that the Trump administration is going to have careful regulation of the financial industry?
The basic story here is that in order to give donors in the financial industry still more money, Trump is planning to privatize a perfectly well-functioning public system for securitizing mortgages. This move will almost certainly increase the cost of mortgages for homebuyers, the only question is by how much. And it raises the risk for future financial crises and government bailouts.
Making the financial sector less efficient in order to hand money to contributors is very much front and center in the Trump administration. This is the same story with his decision to promote crypto currency, which is making Trump and his friends tens of billions of dollars; as opposed to letting the Federal Reserve Board issue a digital currency, which would save us tens of billions in bank and credit card fees.
The evisceration of the Consumer Financial Protection Bureau follows the same pattern. Trump is giving a green light to his finance buddies to find every more creative ways to rip off businesses and ordinary people.
That’s how we should understand the drive to privatize Fannie and Freddie. How could anyone oppose it?
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