Donald Trump is expected to push for the privatization of Fannie Mae and Freddie Mac, two major mortgage-backing companies. These companies were taken over by the government during the 2008 financial crisis to stabilize the housing market. If Trump succeeds in privatizing them, it could lead to higher mortgage costs for new homebuyers, especially those with lower incomes.
The federal government’s stake in Fannie Mae and Freddie Mac is worth billions, so privatizing them would be a financial windfall. However, it could also make mortgages more expensive by making them seem riskier to investors. This could drive up the cost of 30-year fixed home loans for everyone.
Economists warn that privatizing these companies could add between $1,800 and $2,800 per year to the cost of a typical mortgage. This increase would be even higher for lower-income families or those with lower credit scores. The fear is that without government backing, investors would demand higher rates to compensate for the increased risk.
Sources:
https://amp.cnn.com/cnn/2024/12/02/economy/fannie-mae-freddie-mac-mortgage-rates-housing