:max_bytes(150000):strip_icc()/GettyImages-2194864683-37ef62c203fb4a0a95faf273dfcb5285.jpg "Trump Is Set to Unveil Big Plans Addressing Housing Affordability This Week. Here’s What We Know")
:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-2194864683-37ef62c203fb4a0a95faf273dfcb5285.jpg)
Key Takeaways
- President Donald Trump will speak at the annual World Economic Forum this week.
- He has signaled he will use his speech to roll out “aggressive” housing policy reforms.
- Experts expect Trump to propose changes to mortgages and fees during his speech in Davos, Switzerland.
Housing affordability has been a problem for the U.S. economy in recent years, and President Donald Trump is set to roll out what he describes as a series of “aggressive” reforms for the housing market this week.
Trump has said he will use his Wednesday speech at the World Economic Forum annual meeting in Davos, Switzerland, to lay out his ideas for the housing market. Trump and his advisors have signalled that the plans could have big implications for mortgages and how Americans buy homes.
Why This Matters for You
High home prices and mortgage rates affect household budgets, labor mobility, and long-term wealth building for millions of Americans, especially first-time buyers. Policies that change borrowing costs, housing supply, or how people use retirement savings can ripple through the broader economy by influencing consumer spending, investment returns, and financial security in retirement.
Here’s what we know about the plan so far.
You Would Be Able to Use Retirement Funds to Buy a Home
Trump will announce a proposal to let Americans tap into their 401(k) retirement plans to pay for housing, said National Economic Council Director Kevin Hassett, a top economic adviser to the White House, on Fox Business last week.
The government already allows retirement savers to withdraw $10,000 without penalty from Individual Retirement Accounts (IRAs), but not 401(k)s, which are a common workplace benefit.
“The typical monthly payment about doubled for an ordinary family buying an ordinary home. And the down payment they needed to buy a home went from about $15,000, to about $32,000. And so there’s a real lot of room to make up,” Hassett said.
Large Investors Will Be Banned From Buying Homes
Already, Trump has announced some of his ideas for housing market reform, including a proposal to ban large institutional investors from purchasing single-family homes. The proposal is designed to free up more housing inventory.
“People live in homes, not corporations,” Trump wrote on social media in early January.
Industry experts have said that most investors buying homes are unlikely to meet the criteria if it is designed for larger, institutional players.
The Government is Buying Mortgage Bonds to Lower Interest Rates
He also signaled an effort to lower mortgage rates by instructing government-backed mortgage lenders Fannie Mae and Freddie Mac to purchase $200 billion worth of mortgage bonds.
The move may already be having an impact, with Goldman Sachs noting that mortgage rates dropped 15 basis points after the announcement.
“This should improve affordability and improve sentiment in the housing market ahead of the key spring homebuying season,” wrote Goldman Sachs analyst Arun Manohar, who forecasted home sales could rise by 5% to 7% in 2026.
Portable Mortgages, Longer Loans Are Other Ideas to Watch
One idea Trump could lay out this week is a 50-year mortgage, which his administration has floated before.
Longer loan terms could lower borrowers’ monthly payments. However, it would also increase the borrowing costs a homeowner would pay over the life of the loan.
Another change that Trump is reportedly considering is a “portable mortgage,” which would allow home borrowers to transfer their mortgage from an existing house to a new one. The idea was also recently backed by leading Senate Democrats in their housing policy proposals, outlined this month.
Supporters say it could help tackle the “lock-in” effect, where homeowners are reluctant to list their house for sale because their mortgage rate is significantly lower than the borrowing costs for a new home loan. But others argue that the system isn’t designed to support the policy.
“Portability isn’t compatible with the architecture of U.S. mortgage finance, and even if it were, it wouldn’t fix the broader affordability problems facing the housing market today,” wrote Realtor.com Senior Economist Jake Krimmel.
