, October 8, 2025
News Summary
The White House called on major government-controlled mortgage backers to encourage large homebuilders to accelerate construction, sparking questions about how that would work amid a softening housing market. Fannie Mae and Freddie Mac together guarantee a large share of U.S. mortgages, and any shift in their practices could affect construction finance. Experts say undeveloped lots often sit idle due to weak demand, higher building costs, labor shortages, zoning and permitting delays, and condo financing hurdles. Industry groups and regulators signaled attention, but no concrete programs were announced and analysts stress coordinated action is needed to boost supply.
President Urges Mortgage Giants to Push Big Homebuilders as Industry Seeks Clarity
A social media post from the President asking two large government-controlled mortgage firms to spur big homebuilders into action has left industry leaders and housing experts uncertain about what concrete steps are expected. The post included a claim that builders are holding roughly 2 million empty lots, a figure that has not been clarified with supporting data. The request did not spell out specific programs or policy moves, and regulators and builders are still sorting through what could realistically be done.
What was asked and why it matters
The request called on Fannie Mae and Freddie Mac, the two government-controlled firms that together back or guarantee more than half of the country’s residential mortgage market, to help get large homebuilders building again. The regulator that oversees those firms publicly shared the post and said he would look into it, which added urgency but not detail. Observers said it is unclear how the mortgage firms would deliver on the request, whether by offering new loan products, speeding approvals, or other steps.
Industry reaction and confusion
Builders and trade groups agreed that more construction is needed to improve housing affordability, but they warned that the barriers are complex. A national builders’ organization said restoring homebuilding will require cooperation with government to cut red tape, ease material and labor shortages, and expand access to affordable financing. At the same time, builders are showing signs of pullback: many reported cutting list prices and increasing incentives as buyer demand softens.
Economic indicators and market context
The housing market shows mixed signals nine months into the current administration. Median sale prices continued to rise year-over-year, while inventory numbers increased and total sales slipped. A widely cited housing site estimated the U.S. had a housing supply gap of about 3.8 million homes in 2024 and that closing that gap would take years at the current building pace. In the South, the supply shortfall was estimated at more than 1.1 million homes.
Builders are reacting to the demand squeeze. Data from a builders’ survey showed 39% of builders reported cutting prices in September, the highest share since the pandemic period, with an average price reduction around 5%. Sales incentives were used by about 65% of builders. Sentiment among builders remained weak, with an index sitting at 32, the lowest since late 2022.
Construction activity and lots that have not been started
New construction activity has slowed in recent months. Housing starts fell sharply in August, with a drop that left the annualized rate near 1.307 million. At the same time, a measure of single-family lots listed for sale but not yet started reached multi-decade highs above 100,000 units. Analysts pointed to weak buyer demand, higher construction costs, tariffs on building materials, and a shortage of construction labor as main reasons many lots have not moved to active construction.
What Fannie Mae and Freddie Mac might do
Experts outlined a few possible roles for the mortgage firms if they chose to act. They could offer broader loan products or speed up approval processes to make construction financing easier. Condominiums and multi-unit projects were highlighted as areas where approvals and financing are often difficult because of strict presale, reserve, occupancy, and insurance rules. Even so, it is uncertain whether builders would take up new offerings without firmer demand signals and clearer cost forecasts.
Political background and next steps
The call to action comes amid earlier talks about changing how the mortgage firms are structured, after they spent many years under federal conservatorship since the 2008 financial crisis. There was also a recent meeting between the administration and bank leaders about potential shifts in those firms’ roles. A temporary federal funding gap at the time had paused the release of a key jobs report, adding uncertainty about the economy and how monetary policy might change in coming months. Markets were pricing in the chance of policy easing later in the year, and the average 30-year fixed mortgage rate was reported near 6.34% for the week ending in early October.
Bottom line
A high-profile call for mortgage giants to prod large builders has raised questions about execution, timing, and likely impact. Building more homes is widely seen as a long-term fix for affordability, but industry leaders say solutions need to address local zoning rules, permitting delays, material and labor constraints, and the economics of building. For now, the market is waiting to see whether regulators or the firms themselves will lay out clear programs that match the scale of the stated goal.
FAQ
Q: Who asked the mortgage firms to take action?
A social media post from the President called on the two government-controlled mortgage firms to encourage big homebuilders to start building more homes.
Q: Which mortgage firms were named?
The post named the two large government-controlled mortgage firms that together back or guarantee more than half of U.S. residential mortgages.
Q: What specific steps were requested?
No detailed plan was given. The request did not explain particular programs, financing tools, or rules change to be used.
Q: Are builders actually holding 2 million empty lots?
The number cited in the social media post has not been documented in the post itself. Analysts say many lots are unfinished for reasons including weak buyer demand, high construction costs, tariffs, and labor shortages.
Q: Could the mortgage firms help build more homes?
Possible actions include creating loan products for construction, speeding approvals, or easing requirements for certain project types like condos. Still, experts say local rules, costs, and demand will drive actual building decisions.
Q: What are the main obstacles to more homebuilding?
Common barriers include zoning and permitting rules, higher materials costs, construction labor shortages, and weaker buyer demand in some areas.
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Key Facts at a Glance
| Topic | Key point |
|---|---|
| Request | President asked two government-controlled mortgage firms to encourage big homebuilders to build more homes. |
| Claim about lots | Post cited roughly 2 million empty lots held by builders; claim not detailed in the post. |
| Mortgage market role | These firms back or guarantee over half of U.S. residential mortgages. |
| Housing gap | Estimated supply shortfall near 3.8 million homes; South most affected with 1.15 million gap. |
| Construction activity | Housing starts fell sharply; many lots listed for sale but construction not started, above 100,000 units. |
| Builder market signals | 39% cut prices in September; average cut about 5%; sales incentives around 65%. |
| Mortgage rate | Average 30-year fixed rate about 6.34% in early October. |
| Main barriers | Local zoning and permitting, material tariffs, labor shortages, and weak buyer demand in parts of the country. |
Deeper Dive: News & Info About This Topic
Additional Resources
- Reuters: Trump calls on Fannie Mae, Freddie Mac to get big homebuilders going
- Wikipedia: Fannie Mae
- Bloomberg: Trump call for Fannie, Freddie to spur building is a mystery
- Google Search: Trump Fannie Freddie spur building
- U.S. News: Trump calls on Fannie Mae and Freddie Mac to get big homebuilders going
- Encyclopedia Britannica: Fannie Mae
- Investing.com: Trump yet to decide on Fannie Mae, Freddie Mac IPO — Pulte says
- Google Scholar: housing supply Fannie Freddie 2025
- Newsweek: Donald Trump housing update
- Google News: Trump Fannie Mae Freddie Mac homebuilders
Author: Construction NY News
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