🎙️ Val's Vibe Episode 9: Navigating the Mortgage Landscape in 2025

In this episode of Val's Vibe, host Valerie Saunders dives into the impact of President Donald Trump's second term on the housing and mortgage industry. From his inaugural day packed with executive orders targeting inflation and housing costs, to his bold plans for privatizing Fannie Mae and Freddie Mac, there’s a lot to unpack.

Val explores the implications of these policy shifts, including potential disruptions in the housing finance system, changes in mortgage rates, and how Trump's broader economic agenda might shape the industry. She also discusses Bill Pulte's nomination to lead the Federal Housing Finance Agency, reflecting on her own experience with outgoing director Sandra Thompson and what this leadership change could mean for the future.

With 2025 poised to be a year of volatility and change, Val emphasizes the importance of staying informed and engaged—whether through podcasts like this or active participation in trade associations like the National Association of Mortgage Brokers.

Tune in to hear Val’s insights and predictions for the road ahead, and don’t miss her next episode for even more on the evolving mortgage landscape!

🌐 Stay connected: Visit namb.org to learn more about joining the National Association of Mortgage Brokers. 

Transcript

  📍 Hey everybody, this is Valerie Saunders. Welcome to another episode of Val's Vibe. This has been an interesting week starting off on Monday where we had the inauguration of President Donald Trump into his second term. So I thought I would take an opportunity on today's podcast to sort of delve into some of the latest developments.

that may be shaping the housing and mortgage industry and how President Trump's second term might influence the overall mortgage landscape in particular in 2025. So, as we know, on Monday, President Trump returned back to the White House. And he brought with him a lot of proposed policies aimed at impacting the housing market.

One of these primary objectives is to combat inflation with a particular focus on reducing housing costs.  Trump was a busy guy on his first day in office, he issued a lot of executive orders directing his administration to cut regulations contributing to high consumer prices in housing and energy sectors.

Despite all these efforts, experts are still cautioning that any price reductions from regulatory changes may not be immediate. And we saw that reaction from Fannie Mae when they recently announced a change in their housing forecast to basically drop the amount of home price growth in 2025 and also indicated that they believe that interest rates are going to hover around that 6.

5 percent throughout 2025, which It's not necessarily the response that we in the mortgage industry wanted. We're all looking for those rates to drop into that elusive 5 percent rate, even 5. 99. Another area of focus that President Trump had in also as part Campaign initiatives was the potential privatization of Fannie Mae and Freddie Mac.

We all know those as the government sponsored enterprises that of course play a crucial role in our housing market by setting lending standards and guaranteeing, like basically half of all the residential mortgages originated in the US. President Trump has expressed an interest in returning these entities to the private sector, which has definitely gained a lot of attention from investors and all of us who are active within the mortgage market.

But what would privatizing Fannie Mae and Freddie Mac look like? First of all, it could have some significant disruptions. Of course, Fannie and Freddie are an integral part to financing mortgages and keeping rates low. Privatization could lead to higher mortgage rates. Some analysts are estimating an increase of over a quarter of a percentage point.

The process is also Without a doubt going to be complex and challenging and investors are really remaining uncertain about the timing and implications of what this is going to look like. An additional development to this was, excuse me, President Trump's announcement. To nominate Bill Pulte as the next director of the Federal Housing Finance Agency who of course oversees Fannie Mae and Freddie Mac.

I do want to make a point in saying that outgoing director Sandra Thompson, Was wonderful to work with from a open door policy perspective through my work within the National Association of Mortgage Brokers. I did have the opportunity to meet with her privately several times. I did have the opportunity to actually do some fireside chat interviews with her as part of our legislative and regulatory conferences.

I of course hope that that sort of openness extends to Bill Pulte. We're gonna see, you know, Pulte's background is a private equity executive, he's a philanthropist, he does have a lot of social media influence. Which does position him as a sort of a notable and interesting choice for this role.

As we know, FHFA does play a critical role in any of the plans to privatize Fannie and Freddie. And Pulte's leadership is really going to have a potential to shape the future of the housing finance system. Looking towards mortgage interest rates, President Trump has promised to make homeownership more affordable by lowering mortgage rates through policies aimed at reducing inflation.

Based on Fannie and Freddie's recent change in forecasting, they don't seem to necessarily have the same viewpoint. Maybe those impacts won't happen immediately. Definitely Fannie Mae doesn't feel that way. Also some economists and analysts suggest that his economic agenda could really set the stage for higher rates.

You know, rates are influenced by several factors moves in the 10 year treasury bond, which a lot of lenders use as a guide to price home loans. Trump has also stated plans to impose tariffs, lower tax rates, deregulation, that could boost the economy. But these moves could also raise inflation and government debt, which unfortunately drive mortgage rates higher.

So In summary, what is 2025 going to look like? Well President Trump's administration you know, does aim to implement his policies  to reduce housing costs hopefully make homeownership more affordable, but You know what that actual impact is going to be on the mortgage industry really remains uncertain.

These factors of potential privatization of Fannie and Freddie, regulatory changes, broader economic policies, could lead to higher rates. volatility. So really as these developments unfold staying informed, being active within a trade association, of course, like the National Association of Mortgage Brokers go to namb.Org to become a member will be crucial for navigating. The evolving mortgage landscape. So until next time, thanks for staying tuned to this episode of Val's vibe where we will continue this conversation and many others. And I look forward to everybody joining me on the next episode. Thanks and hope you have a great day.