UBS' John Lovallo on Trump's teased housing reform plans

Core Insights - The new housing plan could have short-term, intermediate, and long-term impacts on affordability [1] - Short-term measures may include subsidizing mortgages and reducing G fees [2] - Intermediate strategies could involve encouraging younger individuals to enter trades through grants and scholarships [3] - Long-term solutions may require federal pressure on states to ease land restrictions, although local governance poses challenges [4][6] Short-term Measures - Utilizing Government-Sponsored Enterprises (GSEs) to subsidize mortgages and buy more mortgage-backed securities (MBS) [1] - Potential reduction of G fees by 60 basis points per loan [2] - Tariffs could be reduced, with an average of $9,300 per home, including $2,500 specifically on lumber [2] Intermediate Strategies - Encouraging workforce development in trades through grants and scholarships [3] - Potential for building on federal land, although infrastructure challenges exist [5] Long-term Solutions - Federal government could exert pressure on states to reduce land use restrictions [4] - Local and municipal decision-making complicates the implementation of these solutions [4][6] Affordability Impact - Lowering mortgage rates could improve housing affordability, as indicated by the National Association of Realtors affordability index [7] - Current mortgage rates compared to builder-subsidized rates show significant differences in affordability [8]