President Donald Trump is taking aim at existing rules hampering mortgages and construction.
The two executive orders signed by Trump on Friday come as part of the administration’s push to address housing affordability ahead of the midterm elections, the Wall Street Journal reported.
One executive order called on bank regulators to loosen rules on mortgage issuance for community banks. Trump is directing the regulators to swap out “overly technical process-oriented” supervisory guidance, reform capital rules, modernize regulations for appraisals and increase access to Federal Home Loan Bank advances.
Federal Housing Finance Agency director Bill Pulte claimed to the outlet that the order could help bring down mortgage rates by as much as half a percentage point.
Last week, the average rate for a 30-year fixed mortgage climbed to 6.11 percent, reversing a recent drop below 6 percent and threatening to stall a potential recovery in the housing market.
The increase appears driven by geopolitical tensions, specifically strikes by the U.S. and Israel on Iran, which have raised energy prices, revived inflation fears and pushed the yield on the 10-year Treasury to about 4.25 percent.
The other executive order requires federal agencies to find incentives for state and local governments to accelerate housing construction by addressing red tape, like permit processes.
The actions add to the slate of recent legislation aimed at making housing more affordable to Americans.
Last week, the 21st Century ROAD to Housing Act passed the Senate with overwhelming bipartisan support. Key features of the bill include incentives for home construction, housing grants, a program for abandoned buildings and a provision to force institutional investors out of further purchases in the housing market.
But the law still needs to be reconciled with the Housing for the 21st Century Act, a broader action which was passed by the House of Representatives in February.
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