WASHINGTON, D.C. – In a recent appearance on Fox Business’s “Mornings with Maria,” William “Bill” Pulte, Director of the Federal Housing Finance Agency (FHFA) and Chairman of Fannie Mae and Freddie Mac, delivered a stark warning: current interest rates are doing real harm to the housing market, and home loan rates should be forced down to 1% – or even zero – —to save American homebuyers.
A Stark Diagnosis of Housing Market Pain
Pulte argued that Federal Reserve Chair Jerome Powell has “gotten this so wrong” and that the damage to the housing market will reverberate long after he’s gone. He cited reports of homebuilder layoffs and construction slowdowns, emphasizing that while these may help builder profits, they worsen housing access for everyday Americans.
At the core of his message, Pulte asserted:
The rates, the interest rates need to be at 1%. And frankly, I hope that whoever becomes Fed chair takes them down to 1% if not lower.”
He went even further, stating rates “need to be at zero or 1% at the highest,” in his view aligned with a president “extremely competent” at crushing inflation.
Echoing Criticism Beyond the Studio
Pulte’s fiery rhetoric isn’t limited to on‑air remarks. On social media, he blasted the Fed, calling Powell “a main reason for the Housing Supply Crisis” and arguing that high interest rates are trapping homeowners in low‑rate mortgages, discouraging them from selling and further limiting available inventory. In a post on X (formerly Twitter), he said rates must come down – or Powell should resign.
What This Means for Homebuyers
- Affordability Boost: Dropping rates to 1% could dramatically reduce monthly payments, potentially unlocking homeownership for many feeling priced out by today’s 6–7% rate environment.
- Supply Revival: Lower rates may ease the “lock‑in effect” – current homeowners holding onto low‑rate mortgages – encouraging inventory turnover and easing supply constraints.
- Investor vs. Buyer Tension: While homebuilders face pressure to adjust to demand and costs, Pulte believes normal Americans should come first – not institutional interests.
Reality Check: Is 1% Feasible?
While Pulte’s call is bold, major housing economists remain more tempered. For example, Business Insider reports that the Fed is expected to cut rates perhaps twice in 2025, possibly bringing mortgage rates to around 6.4%–6.5%, which would help affordability – hough still far above Pulte’s suggested floor.
