[music] [music] Hello and welcome to Market Domination Overtime. Stocks closing the day lower here after a busy week on Wall Street. Our very own Jared Blickery standing by with the latest market action.Jared, >> busy week. What an understatement. Let's go over the closing numbers here.Pretty red down the line, but I'm going to show you the weeklies as well. Here's the Dow. It's down 177 points or 1/3 of 1% and here's the fi let me put that there we go the 5day price action down about 4/10en of 1% so it was ...

Group 1 - The housing affordability crisis is becoming a significant political issue, with Kevin Warsh suggesting that the Federal Reserve can utilize its monetary policy to lower mortgage rates [1][2] - Warsh believes that lowering interest rates can make 30-year fixed-rate mortgages more affordable, thereby revitalizing the housing market [2] - Trump's support for Warsh is based on the expectation that he will be more proactive in cutting interest rates compared to outgoing Chairman Jerome Powell [2][4] Group 2 - The Federal Reserve does not directly control mortgage rates, but its interest rate decisions can influence them, particularly through their relationship with the 10-year Treasury yield [3] - There are concerns that an explicit focus on cutting the federal funds rate to lower long-term rates could backfire, as noted by Realtor.com senior economist Jake Krimmel [4] - Bill Banfield from Rocket suggests that a policy of gradually reducing the Fed's balance sheet while lowering short-term rates could stabilize or slightly lower mortgage rates [6] Group 3 - Housing affordability is a complex issue that involves both supply and demand factors, with Powell indicating that it is primarily a supply issue, which is beyond the Fed's control [7] - Trump has expressed reluctance to support policies that might decrease home prices, positioning mortgage rates as a key tool in addressing affordability [8]

President Trump just signed an executive order intended to reduce housing costs buy imposing a government ban on private equity firms and institutional investors from participating in the single-family homes marketplace. Not only does this proposed overreach interfere with market forces that want to spur more investment in housing, and increase supply, but it will do little to improve housing affordability. ...

US President Donald Trump has made housing affordability a centrepiece of his economic agenda, recently announcing policies designed to increase homeownership. From restricting institutional investors from buying residential properties to urging "Fannie Mae†and "Freddie Mac†to buy billions in mortgage- backed securities, the administration has leaned on aggressive measures to ease costs. ...

Group 1: Trump's Opposition to 401(k) Proposal - President Trump opposes the use of 401(k) retirement funds for home purchases, despite the proposal from his chief economic adviser, Kevin Hassett [1][2] - Trump believes 401(k)s are performing well, citing an increase of 80-90% in some cases, and prefers to keep them separate from housing market transactions [1] Group 2: Housing Market Context - Rising housing costs have significantly increased typical monthly mortgage payments and down payment requirements, with down payments rising from about $15,000 to $32,000 [2] - Trump's administration is implementing policies to improve housing affordability, including allowing 401(k) withdrawals for home down payments [2] Group 3: Policy Moves to Boost Housing Market - Trump's directive for Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities has led to a decrease in the average 30-year fixed mortgage rate below 6% for the first time since 2022 [3] - An executive order was signed to limit Wall Street institutions from buying single-family homes, aiming to enhance affordability for first-time buyers and young families [4] Group 4: Current Housing Market Challenges - The housing market is increasingly unaffordable, with analysts estimating that home prices would need to drop by about 24% to match rental affordability, which is considered unlikely [5] - The apartment REIT sector is experiencing a surge in demand, with expectations of significant investment opportunities as the gap between buying and renting widens [5]

Core Insights - The Senate Banking Committee has postponed its crypto market structure bill until late February or March due to Coinbase Global Inc. withdrawing support, with a shift in focus towards housing legislation instead [1][2][3] Group 1: Legislative Focus - The Senate Banking Committee is prioritizing housing legislation following an executive order from President Trump aimed at preventing large institutional investors from buying single-family homes, which is a significant expense for many Americans and a contributor to inflation [2] - The pivot towards housing gives the financial and crypto industries additional time to lobby for favorable legislation, but it raises concerns about the future success of the Senate's crypto market structure bill [3] Group 2: Coinbase's Withdrawal - Coinbase withdrew its support for the crypto market structure bill due to disagreements over stablecoin reward provisions with the banking industry, leading to a halt in the planned markup hearing for the legislation [4] - The Banking Committee is urging Coinbase and the broader crypto industry to resolve these issues with banks before revisiting the legislation [4] Group 3: Agriculture Committee's Actions - The Senate Agriculture Committee has released its own version of digital-asset legislation and plans to hold a markup on January 27, although it lacks support from Democratic Senator Cory Booker, raising concerns about its partisan nature [5] - Senate Agriculture Committee Chairman John Boozman acknowledged ongoing differences on fundamental policy issues but emphasized the need to advance the bill [6] - The full Senate will need to vote on a combined measure that merges the Agriculture Committee's proposal with the Banking Committee's bill, which faces challenges in securing the necessary bipartisan support for passage [6]

Core Viewpoint - The effectiveness of the Trump administration's initiative to purchase $200 billion in mortgage-backed bonds to make housing more affordable is questioned, with experts suggesting that the primary issue lies in housing supply rather than demand or financing [1][2][3]. Group 1: Mortgage Rates and Market Impact - Benchmark 30-year mortgage rates have been decreasing, largely due to the Federal Reserve's cuts in short-term interest rates, aimed at supporting a weakening job market while controlling inflation [4]. - The average rate on a 30-year fixed-rate mortgage peaked at nearly 8% in fall 2023 but fell to 6.15% by the end of 2025, briefly dropping to 6.06% after the bond purchases were announced, before rising slightly to 6.09% [5]. - The Mortgage Bankers Association reported that 30-year mortgage rates recently reached their lowest level since September 2024, leading to a surge in refinancing activity, which is at its highest since September 2025 [6]. Group 2: Expert Opinions on Housing Affordability - Experts, including Joseph Brusuelas from RSM US LLP, argue that the $200 billion in mortgage bond purchases will not significantly alleviate housing affordability issues, emphasizing that the real problem is supply rather than demand [3]. - Patricia Zobel from Guggenheim Investments expressed skepticism about the potential for these purchases to materially lower housing prices for consumers, although she noted a slight narrowing of mortgage bond yields relative to Treasury bonds [3]. Group 3: Government Actions and Transparency - The Trump administration has initiated the mortgage bond purchases, but details regarding the total amount and pace of these purchases remain unclear, as the Federal Housing Finance Agency has not provided information [7].

Core Viewpoint - President Trump's executive order to restrict Wall Street investors from purchasing single-family homes aims to promote housing affordability but may inadvertently increase prices due to heightened demand without a corresponding increase in supply [1][2][3]. Group 1: Executive Order and Its Implications - The executive order directs federal regulators to promote home sales to individuals and prevent federal programs from facilitating single-family home sales to Wall Street investors [2]. - The order also mandates antitrust scrutiny of institutional home purchases and encourages Congress to codify these changes into law [2]. Group 2: Market Dynamics and Expert Opinions - Experts argue that the housing affordability issue is primarily a supply problem rather than a demand problem, indicating that increasing demand without increasing supply will lead to higher prices [4][7]. - Housing prices in the U.S. have increased approximately 75% since 2016, significantly outpacing overall consumer price growth, although the rate of increase has slowed recently, with a mere 1.7% rise in October year-over-year, marking the smallest increase in a decade [9]. Group 3: Supply Chain and Construction Costs - The Trump administration has attempted to ease construction costs, but the federal government has limited ability to boost housing supply as relevant regulations are largely controlled at local levels [6]. - The National Association of Home Builders has been advocating for policies to lower building costs, emphasizing that corporate investment has been beneficial for new home construction [13]. Group 4: Institutional Investment in Housing - Wall Street firms, including Blackstone and American Homes 4 Rent, have acquired thousands of homes since the 2008 financial crisis, owning about 3% of all single-family rental homes by June 2022 [14]. - These firms argue that their investments have not contributed to inflation in housing prices, with Blackstone highlighting its status as a net seller of homes over the past decade [15].

Core Viewpoint - The Trump administration is proposing several measures to address the high cost of housing in the US, including banning large institutional investors from buying single-family homes and introducing new mortgage options to make homeownership more accessible [2][4]. Housing Market Challenges - The US built less than two million new homes in 2024, while eight million new migrants were admitted, highlighting a significant housing shortage [3] - Industry experts emphasize that the primary issue driving high housing costs is the lack of available homes, which cannot be quickly resolved [3][7]. Proposed Measures - The administration's proposals include: - Banning large institutional investors from purchasing single-family homes to prioritize individual homebuyers [4] - Purchasing $200 billion in mortgage debt to lower mortgage interest rates [2][7] - Introducing 50-year mortgages and portable home loans to enhance affordability [13][14]. Impact of Major Investors - Major investors, such as hedge funds and private equity firms, own about 2% of the single-family rental housing stock, and their influence on home prices is debated [6] - Concerns exist that these investors are outcompeting individual homebuyers, particularly first-time buyers, but evidence supporting this claim is limited [5][6]. 401(k) Withdrawal for Home Purchases - A proposal allows Americans to use their 401(k) funds for down payments on homes, which could encourage earlier investment in homeownership [8][9] - Current tax rules impose penalties for early withdrawals, but exceptions exist for certain circumstances [11][12]. Mortgage Innovations - The administration is exploring 50-year mortgages, which could lower monthly payments but increase overall interest costs [13][14] - Portable mortgages are also being considered, allowing homeowners to transfer their mortgage interest rates to new properties, potentially benefiting repeat buyers [14][15]. Expert Opinions - Housing economists argue that financing changes alone will not solve the affordability crisis, which is fundamentally rooted in the housing shortage [16].

Core Points - President Trump signed an executive order to prevent Wall Street firms from purchasing single-family homes, aiming to enhance housing affordability for American families [1][6] - The order mandates federal agencies to draft new restrictions or revise existing rules regarding institutional purchases of single-family homes within 60 days [1][2] Group 1: Executive Order Details - The executive order is titled "Stopping Wall Street from Competing with Main Street Homebuyers" and emphasizes the need to preserve single-family home supply for families [1][2] - Trump instructed the Justice Department and the Federal Trade Commission to investigate large-scale acquisitions of single-family homes for potential antitrust violations, focusing on coordinated vacancy and pricing strategies by institutional investors [3][8] Group 2: Legislative Intent - Trump directed his administration to collaborate with lawmakers to draft legislation that would formalize restrictions on large institutional investors, indicating a desire for these limits to extend beyond his presidency [4] - Any proposed legislation would require congressional approval, potentially leading to a contentious debate in Congress regarding the federal government's role in the housing market [4][5] Group 3: Market Impact and Investor Presence - An analysis by CliftonLarsonAllen highlighted that a nationwide ban on acquisitions would necessitate congressional action, as executive action alone cannot establish such restrictions [5] - Despite their significant role in the housing market, large institutional investors own less than 1% of the nation's single-family housing stock, with firms owning 100 or more homes controlling this small percentage [9] - In the rental market, institutional investors account for only 2% to 3% of single-family rental homes, although their ownership is concentrated in specific fast-growing metro areas [10] - In 22 specific U.S. counties, institutional investors own between 5% and 10% of the housing stock, particularly in cities like Dallas, Houston, and Atlanta [11][12]