President Donald Trump has issued an executive order designed to address rising homeownership costs amid elevated interest rates and inflation concerns. The directive, formally titled “Decreasing Housing Costs for the American People,” instructs federal agencies to proactively eliminate mortgage insurance for qualifying borrowers on future loans and to expand refinancing programs that reduce associated costs. Federal Housing Finance Agency director Bill Pulte indicated the measure could generate substantial savings for millions of Americans, though precise consumer impacts remain unclear pending implementation details.
Homeownership affordability has deteriorated significantly in recent years. Data from the Federal Reserve’s Survey of Consumer Finances, released in early October, indicated that monthly payments on 30-year fixed-rate mortgages for median-priced homes represented approximately 33% of median household income, compared to 26% in 2022. The executive order responds to housing costs becoming a prominent voter concern heading into elections.
The order establishes a pilot program through the FHFA that would cancel mortgage insurance automatically once borrowers achieve specified home equity thresholds on newly originated mortgages. Private mortgage insurance, typically required on conventional loans with down payments below 20%, currently costs between 0.2% and 2% annually depending on various borrower factors. Current borrowers can generally request PMI removal once loan balances fall below 80% of the original purchase price, though the new program aims to streamline this process. The median home down payment during the second quarter of this year was 13.7%, meaning most current mortgages carry insurance.
The executive order additionally seeks to reduce refinancing expenses by making permanent an FHFA pilot program that waives lender title insurance policies and permits cost-effective alternatives. Title insurance and related lender fees constitute the largest component of closing costs, according to a 2025 Urban Institute report. The original pilot, scheduled through November 2027, was limited to refinances with specific loan-to-value ratios in select states. Previous estimates suggested borrowers could save $500 to $1,500 in closing costs through such programs. Mortgage analysts note the measures may provide incremental relief, though fundamental affordability remains dependent on home prices and interest rates, which as of late October stood at 7.32% for 30-year fixed-rate mortgages.
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