During his Wednesday evening State of the Union address from the White House, President Donald Trump pledged to assist the nation with rising housing costs.
The Trump administration has already taken action to lower mortgage costs but has pledged further relief through interest rate policy changes and upcoming housing reforms.
Trump tied rising mortgage payments to inflation during the Biden administration, stating that “the yearly cost of a typical new mortgage increased by $15,000 under Democrat rule.”
While payment increases over the past several years varied widely by market, loan size, and rate environment, higher rates and home prices drove affordability upward for current homeowners and prospective homebuyers nationwide. Trump claimed those costs are now easing.
“In 11 months, we’ve already taken that annual cost down by $3,000, and it’s coming down a lot lower,” Trump said in his address.
Industry data shows modest improvement in affordability in some markets, as rate volatility cooled and price growth slowed, though payments remain elevated compared to pre-2022 levels.
The most consequential signal for mortgage professionals came from Trump’s comments on the future of the Federal Reserve. He said he will soon announce a new Fed chair “who believes in lowering interest rates by a lot,” adding that, “mortgage payments will be coming down even further early in the new year.”
While the president does not set mortgage rates directly, changes in Fed leadership can influence monetary policy expectations and bond markets, two key drivers of long-term mortgage pricing.
Trump also previewed major housing initiatives, promising “some of the most aggressive housing reform plans in American history,” though he did not offer details. Historically, housing reforms tied to supply, zoning, or construction incentives take time to translate into measurable affordability gains.
On housing demand, Trump linked rising rents and prices to immigration trends, arguing that migration is now reversing and easing pressure on housing. A recent addendum to the Harvard Joint Center for Housing Studies (JCHS) projections highlights that lower than expected immigration levels are set to influence U.S. housing demand through 2035. The original household growth projections relied on the U.S. Census Bureau’s middle-series population forecast, which assumed annual net international immigration around 870,000. However, shifts in immigration policy have reduced actual migration, prompting forecasters such as the Congressional Budget Office (CBO) to lower their estimates and spurring JCHS to evaluate a low-immigration projection with annual net immigration near 420,000.
Economists generally cite long-standing supply constraints and construction costs as primary drivers of housing affordability, though population growth can affect certain regional markets.
For mortgage originators, the address reinforced a clear theme: the administration is prioritizing lower rates and housing affordability. If rate declines materialize in 2026, the combination of pent-up purchase demand and long-delayed refinance activity could bring meaningful volume back into the market.
