President Donald Trump has signed an executive order designed to address rising mortgage costs and housing affordability challenges facing American homeowners and prospective buyers. The executive order, formally titled “Decreasing Housing Costs for the American People,” directs federal agencies to take several actions including proactively canceling mortgage insurance on eligible future loans and expanding an existing refinancing program to reduce associated costs.
The order addresses a significant shift in housing affordability over recent years. According to the Federal Reserve’s Survey of Consumer Finances released in early October, monthly mortgage payments on a median-priced home now consume approximately 33% of median family income, a substantial increase from 26% in 2022. During the second quarter of 2026, the median home down payment was 13.7% of purchase price, reflecting the financial constraints many buyers face when entering the housing market.
One key component of the executive order involves private mortgage insurance, or PMI, which conventional loan borrowers typically must carry when their down payment falls below 20% of the home’s purchase price. The order directs the Federal Housing Finance Agency to establish a pilot program that would automatically cancel mortgage insurance for eligible borrowers once their home equity reaches specified thresholds. Currently, PMI costs typically range from 0.2% to 2% of the loan annually, though rates vary based on factors including down payment size, credit score, and loan amount.
A second major provision makes permanent an FHFA pilot program initially scheduled through November 2027 that reduces refinancing expenses by waiving lender title insurance requirements and permitting cost-effective alternatives. The lender’s title insurance policy and related fees have historically represented a substantial portion of mortgage closing costs. The previous pilot program was limited in scope, applying only to refinances with loan-to-value ratios below 80% in a limited number of states, with estimates suggesting consumers could save between $500 and $1,500 in closing costs.
Industry representatives have responded positively to the initiative. Federal Housing Finance Agency director Bill Pulte stated that millions of Americans would realize significant savings through the measures. However, housing market analysts note that without additional implementation details, the broader consumer impact remains unclear, particularly given that mortgage interest rates and home prices remain the primary determinants of overall housing affordability in the current market.
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