Treasury Secretary Scott Bessent said on Thursday that one of his top priorities is addressing the U.S. housing affordability crisis.
“We are really going to work on this housing affordability crisis. That’s one of my big projects for the fall,” Bessent told FOX Business’ Maria Bartiromo during an interview on “Mornings with Maria.”
Bessent said that the White House is exploring how to monetize Fannie Mae and Freddie Mac, which could involve selling all or part of the government’s stake in the enterprises. Fannie Mae and Freddie Mac play a critical role in the home financing industry and have been under federal conservatorship since the 2008 financial crisis.
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Bessent said the administration is looking at how to get the best value for taxpayers when it comes to Fannie Mae and Freddie Mac, and how to keep mortgage rates from rising – or lower them – in order to fix the persisting affordability crisis.
The housing crisis, meanwhile, is only deepening with high home prices and elevated interest rates reducing homebuying to its lowest level since the mid-1990s, according to the annual State of the Nation’s Housing report from the Joint Center for Housing Studies (JCHS) of Harvard University.
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To exacerbate issues, homeowners and landlords are also facing higher insurance premiums and property taxes. The exorbitant rent has also left “more people than ever cost burdened, and has contributed to a sharp rise in homelessness,” according to the report.
Real estate transactions tend to peak from May through August, with June historically being the busiest month, according to housing industry experts. But during this summer season, activity has remained “sluggish” for existing homes and new ones, according to Realtor.com senior economist Joel Berner.
While some homebuyers who have been relegated to the sidelines by high financing costs got some encouragement last week, Berner said it may take a bit longer to get more of them back in the game.
“The Federal Reserve’s decisions next month could have a major impact on the housing market, but this Fed has proven to be cautious when it comes to cutting rates, so it will take more positive news on the inflation front to inspire them to bring interest rates down,” Berner said.
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