Trump's housing director rips the Fed, says the slow pace of rate cuts is fueling America's home-inventory problem

Business Insider

3 hours ago

Federal Reserve Chairman Jerome Powell's decision to keep rates unchanged earlier this week on Wednesday was widely expected by the market, but it was bashed by the president and his administration.
In addition to Donald Trump, the critics of the latest Fed decision include Bill Pulte, the director of the Federal Housing Finance Agency and chairman of Fannie Mae and Freddie Mac.
Many naysayers argue inflation has come down enough for the Fed to cut rates, but Pulte takes another issue: he believes sustained high rates are kneecapping America's housing market and exacerbating the affordability crisis.
On Wednesday, prior to the Fed meeting, Pulte posted on X that Powell needed to "lower interest rates today," or immediately resign, arguing that Fannie Mae and Freddie Mac could help more Americans afford a house if rates came down.
Because President Trump has crushed inflation, Fed Chairman Jerome Powell needs to lower interest rates today, and if not Chairman Powell needs to resign, immediately. Fannie Mae and Freddie Mac can help so many more Americans if Chair Powell will just do his job and lower rates.
— Pulte (@pulte) June 18, 2025
After the decision to hold rates steady, Pulte shared a series of posts on X further bashing Powell, calling him "a main reason for the Housing Supply Crisis in this country" and criticizing him for hurting the mortgage market.
Jerome Powell is a main reason for the Housing Supply Crisis in this Country. By improperly keeping interest rates high, Jerome Powell is trapping homeowners in low-rate mortgages and choking off existing home sales—directly fueling the housing supply crisis. He must lower rates.
— Pulte (@pulte) June 20, 2025
As he's done in the past, President Donald Trump also ripped into the Fed's decision on Truth Social, referencing Pulte's statements and calling for Powell to lower rates to 2.5%. The president has repeatedly clashed with Powell, blaming him for holding the stock market back, and even threatening to fire him.
Powell's reasoning behind staying in wait-and-see mode is that the Fed is monitoring the impacts of tariffs on inflation and wants to see more evidence that inflation has cooled for good.
Pulte's argument is referring to the "lock-in" effect in the housing market, which some housing experts argue has exacerbated supply issues by keeping current owners from selling their homes to avoid having to refinance a new purchase as a higher rate than their existing mortgage.
The 30-year mortgage rate rose from historically low levels under 3% during the pandemic to around 7% today.
Some housing experts may agree with Pulte's assessment that high rates are hurting the market. Lawrence Yun, chief economist at the National Association of Realtors, sees mortgage rates as the "magic bullet" that'll alleviate the housing crisis.
"Part of the delay in recovery is because the Federal Reserve has changed its outlook and appears to be on pause for a longer period," Yun said during a NAR economic forum earlier this month.
Others are optimistic that the housing market will improve this year. The Fed is still on track for two cuts in 2025, and Nadia Evangelou, senior economist at NAR, sees a path for mortgage rates to decline to 6.4% to 6.5% by year-end.
In some markets across the country, buyers are gaining the upper hand as home price appreciation slows and increases affordability.
"We are at a bit of a turning point with mortgage rates," Evangelou told Business Insider. "We expect affordability to be better and for rates to ease, but we don't know to what extent. When mortgage rates are at 6.7% or lower, we typically see more activity."