Trump Signs Order to Cut Housing Costs as Mortgage Rate Stands at 7.32%

Key Facts

U.S. President Donald Trump on October 22 signed an executive order titled “Reducing Housing Costs for the American People,” aimed at reducing barriers to mortgage issuance and the costs that limit homeownership, while boosting competition and innovation, according to the order published on the White House website. The measures include pilots involving mortgage insurance and title insurance, as well as directives to lower interest rates on certain direct home loans offered by the Departments of Agriculture and Veterans Affairs. The order does not mandate an automatic cut in the market mortgage rate for all borrowers, as some of its measures depend on launching pilot programs, eligibility conditions and institutional approvals. The announcement came as the average rate on a 30-year fixed mortgage stood at 7.32% in the week ended October 22, according to the Associated Press. That was down from 7.40% the previous week, but above the average of 6.19% recorded a year earlier.

Under one track, the order directs the director of the Federal Housing Finance Agency to establish a pilot program at the two housing finance enterprises to periodically review new single-family home loans. The review is intended to identify borrowers who have met the ownership requirements and other conditions needed to cancel mortgage insurance. The assessment will rely on automated models and other data, and the program will be limited to loans issued after its creation, according to the order. This restriction means existing loans are outside the scope of the pilot as written. Insurance also will not be canceled automatically simply with the passage of time; it will depend on eligibility being confirmed in a loan review.

The order links a decision to cancel insurance to equity requirements calculated using the property's current market value, along with considerations of financial soundness and the enterprises' obligations. It also requires compliance with other relevant legal, contractual and regulatory requirements. The directive therefore sets conditions on the use of the pilot program rather than calling for insurance to be canceled for all borrowers or all loans. The track aims to review the loan and equity position after the mortgage is originated, with the decision remaining subject to the rules set by the agency and the enterprises. These conditions are part of the pilot's design as set out in the executive order.

Another track concerns title insurance in refinancing transactions. The order directs an expansion of a pilot program that accepts an automated assessment of title risk as an alternative to a lender's insurance policy. It calls for the pilot to become an ongoing program available nationwide through the two housing finance enterprises for eligible transactions. It also requires savings to be passed on to borrowers and disclosed to them. This track differs from the mortgage insurance cancellation pilot: it concerns title risk in refinancing, not cancellation of insurance on an existing loan after equity requirements are met. Passing on and disclosing savings is part of the expanded program's mechanism.

For government loans, the order directs the Departments of Agriculture and Veterans Affairs to lower interest rates charged on the single-family home loans each department makes directly. The directive limits the reduction to what is permitted by law and available appropriations, and does not set a uniform amount or implementation date. This step accompanies the insurance and refinancing tracks but applies to direct loans issued by the departments. The order thus spreads its measures across different financing products, with conditions and responsible agencies varying by track. Implementation details remain subject to decisions by the relevant agencies within the legal and financial frameworks specified in the order.

For manufactured housing, the order establishes an innovation task force co-chaired by the secretary of Housing and Urban Development and the director of the Federal Housing Finance Agency. Its mission is to facilitate modern manufacturing of factory-built homes eligible for federal programs. Housing Secretary Scott Turner said in a department statement: “Regulatory bureaucracy has stifled homebuilding for decades, but the Manufactured Housing Innovation Task Force can clear the way for the next generation of housing.” The order gives the task force 180 days from its issuance to submit recommendations to the president. Those recommendations are to include reducing duplicative federal reviews and encouraging modular construction and factory-built homes, making this track one focused on preparing recommendations within a set deadline.

The measures come amid signs of weakening activity in the housing market. Pending home sales fell 7.3% month over month and 11.3% year over year in September, declining in all four U.S. regions, according to the National Association of Realtors. The association's chief economist, Lawrence Yun, said: “Market conditions weakened in September due to the rapid rise in mortgage rates.” On the supply side, permits for single-family homes fell 4.0% in September from August, while starts for those homes declined 4.6%, according to the U.S. Census Bureau. The declines in demand, permits and starts place initiatives to lower financing costs and facilitate homebuilding in the context of a market with weakening activity, while the data do not establish a direct effect of the executive order on those indicators.

The Census Bureau is scheduled to release its October housing starts report on November 18, 2026, the next scheduled publication of U.S. housing data. The manufactured housing task force is due to submit its recommendations to the president within 180 days of the order. The effects of the other directives will depend on the creation or expansion of pilot insurance programs and on loans meeting eligibility and equity requirements. Lower interest rates on direct loans will also depend on what is permitted by law and available appropriations. These tracks remain separate from the market mortgage rate average, which stood at 7.32% on October 22.