Expert believes it's an overall sense of not knowing what's next that's holding things up
The first four months of the second term for US President Donald Trump have been a tumultuous time in the financial markets. Tariffs, threats, and layoffs have led to an uneven market. One financial expert believes the uncertainty of what’s next is holding the market back.
Mark Garland (pictured top) is the managing director of mortgage-servicing rights (MSR) pricing and analytics at SitusAMC. He believes it’s the fear of the unknown, both by the markets in general and individual homebuyers, that is making everyone wait and see what’s next.
“I think the single biggest issue is not any one thing like tariffs, or what Jerome Powell will do, or the strength of the economy,” Garland told Mortgage Professional America. “I think it is the frequency at which the administration sort of turns on a dime into something different. I think we’re not getting a sense of a steady course from the administration.”
Tariffs have been one of the big talking points of the first four months of Trump’s second term. While many of the tariffs have been reduced, the administration is threatening to raise them again if trade agreements aren’t reached.
Garland believes that the threat of further market uncertainty is keeping potential homebuyers and refinancers on the sidelines.
“Until we get a steady course, I think we’re going to see the consumer holding money in reserve and sort of hunkering down,” Garland said.
Affordability continues to challenge consumers
In addition to market volatility, Garland notes the continued issues with affordability, particularly the rising costs of insurance.
“There is significant unaffordability out there right now with the housing price growth,” Garland said. “Another issue is the significant growth in homeowners’ insurance and property taxes. You understand that if you have a house, you have to pay for those things. But all of a sudden, you move to Florida or Texas, where you’ve got some serious increases in homeowners’ insurance.”
Garland also noted that one factor many haven’t discussed is how even more affordable metropolitan statistical areas (MSAs) are having to raise taxes to cover the improvements needed after a population increase.
“We often find that smaller MSAs were kind of untouched by housing growth,” Garland said. “Well, people have discovered where they’re affordable. Those smaller housing markets have had to increase property taxes because they didn’t have the infrastructure for all those incoming consumers.”
For current homeowners in states where the property tax amount is set based on the value of the property when you purchased it, refinancing could come with a large price tag, Garland said.
“Even if you can refi, you look at states like California, Florida, and Michigan, where they established the tax payment based on your original basis from the home,” Garland said. “People in California couldn’t afford to sell their house to themselves because they would reestablish their tax basis, and property taxes could double.”
Housing numbers struggle in April
The uncertainty in the market led to a reduction in single-family housing starts in April. The Commerce Department’s Census Bureau announced on Friday that single-family housing starts fell by 2.1% in April.
Garland is concerned that the challenging start to the spring buying season could carry over into the summer.
George Carrillo of Hispanic Construction Council sees cautious optimism in Fannie Mae’s forecast, noting rising home prices and originations—but warns trade volatility may disrupt progress. https://t.co/FbWAra7sob
— Mortgage Professional America Magazine (@MPAMagazineUS) May 12, 2025
“I think the general concern is the general lack of confidence in the economy from consumers is going to create a very anemic summer buying season,” Garland said. “What we think of as turnover, which is consumers who are moving, they tend to pull back when they’re worried about jobs, and they’re worried about other costs that they’re facing.
“April is the beginning of this, and it peaks usually around late July to mid-August, as people try to get into homes before school starts. We very well might see a very weak market for people moving in the summer months, which tend to be the really big months.”
Adding to the uncertainty is the news of possible cutbacks at Fannie Mae and Freddie Mac, a report denied by the Trump administration. However, with rumors of privatization still on the table, Garland believes it is another piece to the puzzle of uncertainty.
“It’s not even the fact that the uncertainty is so pervasive,” Garland said. “It’s uncertainty in areas that we don’t normally have uncertainty. There was a short window in 2009 when we weren’t sure what was going to happen with Fannie and Freddie, and the US government came in and took them under government control.
“I think the uncertainty from; will they be public? Will they be private? Will the government do an explicit or implicit guarantee? Will the government pay its own debt? It is shaking it down to the roots of our foundation.”
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
