Oct 22 (Reuters) – US President Donald Trump on Thursday signed an executive order aimed at reducing expenses for homeowners by lowering insurance premiums, refinancing costs and interest rates on certain government-backed home loans, the White House said.
High home prices and elevated mortgage rates have put pressure on the Trump administration to deliver meaningful relief as affordability has emerged as a political vulnerability for Republicans ahead of the November midterm elections.
Trump’s order directs the Federal Housing Finance Agency to launch a pilot program to cancel borrowers’ mortgage insurance premiums once they meet equity requirements based on current market values. It also makes permanent an FHFA pilot program waiving title insurance requirements for mortgage refinancings.
In addition, the order establishes a task force on manufactured housing innovation to expand factory-built homes eligible for federal housing programs, and directs the agriculture and veterans affairs secretaries to reduce interest rates on single-family home loans issued by their departments.
Contracts to buy previously owned US homes plunged to a record low in September as rising mortgage rates depressed demand for housing, according to the National Association of Realtors.
US single-family housing starts fell 4.6% in September, while permits for future construction dropped 4% to their lowest level in 3-1/2 years, underscoring the challenges facing the housing market as borrowing costs rise.
The average 30-year fixed mortgage rate last week reached 7.40%, the highest in about three years, before falling to 7.32% this week, according to Freddie Mac. The yield on the 10-year Treasury note, which acts as a pricing benchmark for mortgages, has fallen by more than a quarter percentage point in the last two weeks.
(Reporting by Jarrett Renshaw, Christian Martinez and Ryan Patrick Jones; Editing by David Ljunggren, Sergio Non and Sonali Paul)
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