Report suggests market recovery may be hindered by lower GSE-backed mortgage availability
Credit availability for mortgages backed by Fannie Mae and Freddie Mac has hit a record low this year – and Trump administration cuts to the government-sponsored enterprises (GSEs) are threatening to weigh against the US housing market’s recovery, according to a new report.
Bloomberg Intelligence said efforts in Washington to roll back affordability support, including first-time homebuyer and downpayment assistance programs, meant fewer product offerings for hopeful buyers while staffing cuts and tighter lending standards could also impact the GSEs’ effectiveness in the housing market.
But that report, authored by strategists Erica Adelberg and Viktoriia Adamova, drew a sharp rebuke from a spokesperson at the Federal Housing Finance Agency (FHFA), which oversees Fannie and Freddie.
“Contrary to this media report, Fannie and Freddie have great robust affordability programs, and our actions are reducing the housing and mortgage costs which skyrocketed under Biden’s four-year inflationary economy,” the spokesperson said.
FHFA director Bill Pulte ordered a freeze on programs offering downpayment and closing cost assistance for some disadvantaged groups in March, while Fannie said the following month that it had terminated over 100 employees for unethical conduct including fraud.
Pulte also axed more than a dozen board members at Fannie and Freddie in his first full week at the FHFA helm, and a host of other agency staff were reportedly placed on administrative leave.
Meanwhile, rumors have continued to swirl about a potential end to government conservatorship of the GSEs, which began in the midst of the global financial crisis in 2007-08.
Shelly Antoniewicz of ICI says the US-China tariff pause may lift mortgage rates in the short term but could ease inflation and borrowing costs if it leads to a full trade deal. https://t.co/FZV9gxkEG6
— Mortgage Professional America Magazine (@MPAMagazineUS) May 13, 2025
Pulte said in March that Fannie and Freddie “shouldn’t be in conservatorship forever” but appeared to dampen speculation that he would push immediately to pare government involvement in the enterprises.
“It’s critical to ensure any discussion about exiting conservatorship needs not only to ensure safety and soundness but how it would affect mortgage rates,” he said.
Fannie expects slower economic growth – but lower rates by year end
Fannie’s Economic and Strategic Research (ESR) Group recently cut its 2025 and 2026 growth expectations for the economy, lowering projected 2025 GDP growth to 0.5% (from 1.7%) and trimming its 2026 forecast to 1.9% from 2.1%.
The average 30-year fixed mortgage rate is expected to slide to 6.2% by the end of this year and tick further down to 6.0% at 2026’s year-end. But Fannie also expects home prices to jump by 4.1% this year, compared with its previous forecast of 3.5%, and 2.0% in 2026 – up from prior expectations of 1.7%.
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