There is limited evidence so far that US President Donald Trump’s plan to make housing more affordable by purchasing mortgage backed securities has delivered meaningful results. While the move may have eased borrowing costs slightly, economists say broader market uncertainty and geopolitical tensions linked to the administration could push mortgage rates higher over time.
The planned $200 billion in mortgage bond purchases is expected to reduce borrowing costs only marginally. Many housing experts argue that the main challenge facing the US housing market is not access to financing, but a shortage of homes. In the short term, ongoing market volatility could also add upward pressure on borrowing costs.
Joseph Brusuelas, chief economist at RSM US LLP, said the policy does little to address the real issue. “This is mostly an exercise in burning cash,” he said. “The US housing market does not suffer from a demand or financing problem. It has a supply problem, and $200 billion in mortgage bond purchases will not provide meaningful relief for Americans.”
Patricia Zobel, former head of the New York Federal Reserve group responsible for implementing monetary policy and now leading macroeconomic research and market strategy at Guggenheim Investments, said it remains uncertain how much the policy will lower housing prices for consumers.
Also Read:
Choureh (Chebel) Dandache: Turning Ideas into Functional Realities with Charles Group
Sofian Bengra: Driving Transformation with Impactful Outcomes
About Author
