Planet Money

Can Trump make buying a home more affordable?

January 31, 2026

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  • The extreme difficulty in affording a home, exemplified by James deploying to Djibouti for tax-free pay to save for a down payment, highlights the current housing affordability crisis. 
  • The Trump administration's two initial affordability initiatives focus on curbing large institutional investor purchases and lowering mortgage rates via government purchase of mortgage bonds, despite these measures not addressing the core supply shortage. 
  • Research suggests that the impact of institutional investors on housing prices is highly context-dependent, with evidence showing they may have lowered rents and sale prices in certain periods, but potentially increased them during the COVID-19 market surge. 

Segments

Planet Money Book Tour Announcement
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(00:00:18)
  • Key Takeaway: Planet Money is launching a book tour in about a dozen cities starting in April, with ticket details available at planetmoneybook.com.
  • Summary: Planet Money is promoting its first book, which releases in April. The tour will visit approximately twelve cities across the country. A limited edition tote bag is included with ticket purchases while supplies last.
James’s Extreme Housing Quest
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(00:00:56)
  • Key Takeaway: High housing costs forced James, a National Guard member, to live out of a tent at a campsite after his rent increased significantly.
  • Summary: James Lawrence faced a $600/month rent increase on his Portsmouth apartment, forcing him to move back with his parents hours away from work and school. To commute, he rented a campsite and lived out of his car and tent. He decided to pursue a mortgage but lacked the necessary down payment.
Deployment for Down Payment
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(00:03:39)
  • Key Takeaway: James deployed to Djibouti to earn significant, tax-free hazard pay specifically to fund a down payment for a home.
  • Summary: James devised an extreme plan to deploy to a potentially dangerous location to earn substantial, tax-free income. This income was solely intended to secure the large down payment required in the competitive New Hampshire housing market. He successfully deployed to Djibouti for this purpose.
Trump Administration Affordability Focus
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(00:04:16)
  • Key Takeaway: The Trump administration is focusing on housing affordability with two new initiatives aimed at leveling the playing field against large investors.
  • Summary: Housing costs are pushing people to extremes, prompting political focus from both Democrats and President Trump. The administration is taking action with two initiatives targeting affordability, specifically addressing the perceived competition from Wall Street investors.
Institutional Investor Market Share
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(00:07:37)
  • Key Takeaway: As of 2022, large institutional investors owned only about 0.3% of all U.S. housing units, though this share was highly concentrated in specific Sunbelt cities.
  • Summary: Research by Caitlin Gorbach analyzed the scale of institutional home buying using data through 2022. These large firms accounted for 5% of single-family and townhome purchases nationwide between 2010 and 2022. Ownership concentration was significant in areas like Atlanta, Charlotte, Houston, and Phoenix suburbs.
Investor Impact on Prices
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(00:12:23)
  • Key Takeaway: In certain periods before COVID, areas with high institutional ownership saw lower rents and lower sale prices, possibly due to increased rental supply and neighborhood diversification.
  • Summary: In the aftermath of the housing crisis, investors converted foreclosed homes to rentals, increasing supply and causing rents to fall. Later, sale prices also fell in these areas, potentially because incoming renters changed neighborhood demographics, causing incumbent homeowners to move out. The only period showing higher rents and sale prices was during the COVID housing scramble.
Analysis of Executive Order
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(00:16:17)
  • Key Takeaway: The executive order discouraging government-backed mortgage insurance for large investors is unlikely to significantly move the needle because these firms primarily use cash for purchases.
  • Summary: The executive order directs agencies not to insure mortgages for big investors, but these firms bought homes with cash 83% of the time in the studied period. The most potentially impactful part directs the FTC and DOJ to investigate big purchases for antitrust violations, which could have a chilling effect on buying activity.
Mortgage Bond Purchase Plan
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(00:19:04)
  • Key Takeaway: The administration’s second initiative involves directing government-backed institutions to buy $200 billion in mortgage bonds to lower interest rates, which caused an immediate, though short-lived, rate drop.
  • Summary: This plan aims to lower mortgage rates by increasing demand for mortgage-backed securities (MBS), which are pools of mortgages sold to investors. Announcing the plan immediately pushed rates down by 0.2 percentage points due to the ‘announcement effect.’ However, this relief was quickly reversed by external factors like geopolitical threats, and it transfers interest rate risk to taxpayers via Fannie and Freddie.
Supply vs. Demand Tension
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(00:24:13)
  • Key Takeaway: Both administration policies focus on demand-side solutions, ignoring the consensus among economists that increasing housing supply is the root solution to the affordability crisis.
  • Summary: The administration explicitly avoids policies that would crash housing prices, recognizing home equity as a major source of wealth for current owners. This creates a tension: affordable housing requires supply (many homes), while preserving wealth requires scarcity. Economists argue that building more starter homes is the necessary step.
James’s Motivation for Ownership
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(00:26:01)
  • Key Takeaway: James values homeownership for personal control, the ability to customize his space (like building a catio), and achieving the quiet, spacious lifestyle associated with New Hampshire.
  • Summary: James desires ownership to gain control over his living situation, contrasting with renting where external parties dictate terms. Specific goals include building a ‘catio’ for his cats and having a garage for woodworking projects. He prefers the quiet and greenery of New Hampshire over the excitement of city life.