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Last Thursday Bill Pulte was confirmed as FHFA director in a 56-43 vote. Pulte started the Detroit Blight Authority, and his grandfather started Pulte homes, a residential developer. Bill has been busy since his conf and signaling through X on what are some of his immediate intentions.
On Saturday March 15th Pulte stated that he was ” working around the clock at Fannie Mae and Freddie Mac to pursue actions that make purchasing a home more affordable” This is an encouraging statement as the market has seen a lack of supply of late in the Chicagoland area. The executive order that he is referencing is one signed on Saturday and here is the mission laid out by the President:
” I hereby order the heads of all executive departments and agencies to deliver emergency price relief, consistent with applicable law, to the American people and increase the prosperity of the American worker. This shall include pursuing appropriate actions to: lower the cost of housing and expand housing supply; eliminate unnecessary administrative expenses and rent-seeking practices that increase healthcare costs; eliminate counterproductive requirements that raise the costs of home appliances; create employment opportunities for American workers, including drawing discouraged workers into the labor force; and eliminate harmful, coercive “climate” policies that increase the costs of food and fuel. Within 30 days of the date of this memorandum, the Assistant to the President for Economic Policy shall report to me and every 30 days thereafter, on the status of the implementation of this memorandum.”
WHAT DOES THAT MEAN FOR YOU
Currently interest rates are declining since late January which is a positive sign. Many experts are split on plans for the FNMA and FMCC. Plans of releasing these companies from GSE have become more prominent with Pulte at the helm and the market reaction is unknown. One side believes that removing government security will raise costs as investors will need to increase costs to cover any losses. Another side says FNMA and FMCC will be allowed to reform the loan process and help cut down time on UW, present new loan options for renovations and overall streamline the process to gaining a home loan.
Director Pulte has indicated that releasing these companies is more a matter of when then if, I believe this will give these companies more flexibility to meet fluid market demand. UW times have increased due to regulation imposed by the GSE on these companies. Implementation of AI into this process could shrink this time by 90%. In 2008 when the GSE was imposed, workers with w2 were in mind when the UW standards were put in place. In today’s market w2 workers are around 33% of the workforce now. Gig workers have emerged as the largest group and are shut out of the homeowner UW process at the current moment which leads these buyers into higher costs.
If these companies are released, then a bull run on renovation could begin.
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