Warren to Mortgage Bankers Association: Trump's Trade War is Driving Up Housing Costs Amidst Housing Affordability Crisis
“Donald Trump is personally making it impossible for more Americans to own a home: the National Association of Home Builders estimates that the tariffs President Trump put in place last month would add more than $9,000 to the cost of building a home.”
“(Trump's) latest chaotic round of tariffs will drive up housing costs even more and could force more Americans into heartbreaking realizations that they just can’t afford the dream they thought they could.”
Washington, DC – Today, Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, spoke to the Mortgage Bankers Association about the need for urgent action to reduce housing costs by building more housing supply—and how Donald Trump is personally raising housing costs for Americans with his chaotic, across-the-board tariffs.
Below are Ranking Member Warren’s remarks as prepared for delivery:
It’s a pleasure to be here with all of you. Thank you, Bob, for the introduction. And I believe Debbie Sousa is somewhere in the room, leading a Massachusetts contingency. Thank you, Debbie, for your efforts to get members engaged in advocacy both in DC and Boston.
I believe in what you do—making it possible for more people to own homes. Homeownership matters because it is the major way middle class families build real wealth. It is middle class America’s number one retirement plan—pay off the house and live on Social Security. And, for the luckiest families, homeownership is the best way to boost the fortunes of the next generation and the next generation—passing along that house that Grandma and Grandpa lived in for so long. Housing is deeply woven into the economic success of American families.
But America is in the middle of a full-blown housing crisis. Housing costs have skyrocketed over the past several decades, outpacing families’ incomes and pushing homeownership out of reach for millions.
Forty years ago, the typical home in Boston cost about four and a half times the salary of a Boston Public Schools teacher. Today, that home costs nearly 10 times that teacher’s salary. Housing feels unaffordable because it is unaffordable.
When I took over as Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee at the start of this year, I said that lowering the cost of housing and giving everyone a better chance at owning a home would be one of my top priorities. I’m glad that Chairman Tim Scott agrees. I’m hopeful that Congress will take bipartisan action this year to address our housing crisis.
I want to talk about the action Congress can take in a moment. But first, I want to start with the immediate threats to homeownership and our economy that are barreling down on us like a freight train.
Our economy has taken a dangerous turn. Last week, the stock market experienced its sharpest drop since the start of the COVID-19 pandemic in March 2020. Recession indicators across the economy are flashing red: Continuing unemployment claims are the highest they’ve been in nearly four years; Manufacturing shows signs of contraction; Surveys show that Americans expect more unemployment, less income, and higher prices in the coming months.
But unlike 2020, the unfolding turmoil is not triggered by a deadly virus; instead, this crisis has been created by a single person: the President of the United States.
The economy is tumbling today because President Trump slapped new tariffs on pretty much every country for pretty much every product they sell to the United States. Trump’s tariffs and the economic uncertainty they’ve stoked threaten to fracture supply chains, halt new investments, and drive up unemployment. As the Chairman of the Federal Reserve noted last week, inflation will likely rise, and that will make life more unaffordable—on everything from groceries to cars to housing—for working families everywhere.
Let’s be specific about how Donald Trump is personally making it impossible for more Americans to own a home: the National Association of Home Builders estimates that the tariffs President Trump put in place last month would add more than $9,000 to the cost of building a home. His latest chaotic round of tariffs will drive up housing costs even more and could force more Americans into heartbreaking realizations that they just can’t afford the dream they thought they could.
Trump’s tariffs are only the latest body blow. We are watching a coordinated assault on the federal agencies that help make our housing market work.
I don’t have to tell you that the federal government plays a critical role in helping families access housing and supporting the smooth functioning of the mortgage market. HUD administers programs that affect millions of families – from helping to house our most vulnerable people, to insuring mortgages for homeowners, to supporting local communities and developers that want to build new homes. The FHFA ensures that more families can afford home mortgages, provides stability and liquidity to the mortgage market, and produces critical data that the mortgage industry depends on.
But what’s happening at these agencies is a disaster in the making. Over the past several weeks:
HUD has cancelled or frozen tens of millions of dollars in grants, from contracts that support homeless service providers to grants that support the construction of new housing. Hundreds of affordable housing development projects across the country that were well underway are now in limbo.
FHFA rolled back programs that make it easier for first-time buyers to afford homes and has begun laying off dozens of workers, including researchers who deepen our understanding of the mortgage market and the risks hiding under the surface.
Meanwhile, red lights are flashing at Fannie and Freddie. One of the new FHFA Director’s first steps at FHFA was to overhaul the Fannie and Freddie Boards to consolidate power and make himself Chair. That move conflicts with the plain text of federal law, and could clear the way for a move to reprivatize Fannie and Freddie in a way that helps out big investors but that raises home buying costs for families.
The Trump Administration is even going after home loan foreclosure prevention efforts at the VA that could throw thousands of veterans out of their homes. Here I want to say a very special thank you to you for your leadership in calling this out and fighting for veteran homeowners.
That’s where things stand now, but things are getting worse. The Trump Administration reportedly plans to cut HUD’s workforce by half, including an 84% cut to the office that implements programs that support the construction and rehabilitation of affordable housing.
HUD also reportedly plans to shutter dozens of field offices across the country—offices that I know you all work closely with—that underwrite mortgage insurance for homes, apartment buildings, nursing homes, and hospitals—another move that could run afoul of the law.
Additional cuts are expected at FHFA, and at Fannie and Freddie, as well.
Each of these actions will make buying and selling homes more expensive for current homeowners and, for those who don’t yet have homes, move the dream of homeownership further out of reach. In other words, each of the actions the Musk DOGE team has taken will make America’s homeownership crisis worse.
I’m surprised that Secretary Turner failed to address this in his remarks. He owes the public an explanation for how HUD will fulfill its obligations under the law, or help lower housing costs, or help bring homeownership within reach for working families with half as many workers. FHFA Director Pulte and this Administration also need to stop their illegal actions that gut basic oversight and management of the mortgage market before they trigger a full-blown mortgage housing crisis that could spread to our broader economy.
The same goes for President Trump and Elon Musk trying to gut the Consumer Financial Protection Bureau. The CFPB plays a critical role in the mortgage market by curbing bad actors, halting abusive mortgage collections,collecting data to streamline refinancing for families, and so much more. The CFPB is all about keeping the mortgage market fair and competitive.
The Mortgage Bankers Association said it best in your amicus brief to the Supreme Court in a case that challenged the constitutionality of the CFPB’s funding structure: as you said, a world without the CFPB “could set off a wave of challenges and the housing market could descend into chaos, to the detriment of all mortgage borrowers.” While we may disagree on where some of the guideposts are set, I think we all agree that we need clear and straightforward rules to keep our mortgage markets strong, stable, and safe.
And that brings me to this: When it came time to defend the CFPB, thank you for putting yourselves out there by speaking up and for choosing stability over an ideological fight. I hope MBA will do the same as we defend federal agencies and the critical functions they serve from the attacks they face today.
Because the hard truth is that we cannot leave it to states and local communities to solve the housing crisis on their own. The federal government has a role to play, and it is time for the feds to step up and be a better partner to communities that are ready to build more housing.
There are a lot of reasons why housing has become so unaffordable for too many families. The Fed’s monetary policy has made it more expensive to build and buy homes. Climate change has made natural disasters more common and extreme, pushing up the price of home insurance. Private equity and corporate giants unfurling their tentacles across the housing market are increasingly pricing families out of their communities.
But the underlying reason why housing costs are so high is Econ 101: there isn’t enough housing to go around. By some estimates, we’re facing a shortage of 5 million homes. Nothing gets better if we don’t build more housing.
What kinds of housing do we need? All kinds, everywhere. More homes in rural areas and in urban areas, more manufactured homes and ADUs, more homes for seniors and for families with young children, more homes for servicemembers and veterans, for people in college, for people with disabilities, for people who don’t have housing.
It’s time for the federal government to be a good partner and play a bigger role in increasing housing supply across the country.
This doesn’t need to be a one-size-fits-all approach. I’m going to keep fighting to get meaningful federal resources to expand housing supply. My bill with Senator Warnock and Representative Cleaver would make a bold investment in the Housing Trust Fund to help build nearly 3 million new affordable homes and lower rents by 10%. To be sure, it’s an uphill battle—our Republican friends wince when they see dollar signs in this space. But housing isn’t free, and you don’t get what you don’t fight for.
There are other solutions we can consider that go beyond partisan debates.
Congress can create incentives for localities to modernize building codes and improve zoning so the cost of building housing drops. Outdated, duplicative building codes and long delays for inspections drive up building costs. So, for example, if a town will change codes and ordinances to reduce building costs by 10%, the federal government could offer grants the town could use to further cut housing construction costs or to build a new elementary school or revitalize a downtown area.
A provision in my and Senator Warnock’s bill does that. I’m also working with Senator Kennedy on a related proposal to use the federal government’s carrots more effectively to incentivize new construction.
Or consider ADUs. A modest federal grant could help pay to provide homeowners with technical assistance on building on ADU in their backyard. Federal dollars could also put a sweetener on the table to cover some of the initial design and construction costs.
There is no shortage of good, and in many cases bipartisan, work done by members on the Banking Committee on these and other solutions that I will be looking to advance in our housing markup discussions. For example:
Senator Tina Smith is working with Senator Mike Rounds to protect and expand housing supply in rural areas; Senator Lisa Blunt Rochester has a bill that would give local governments technical assistance and support to overhaul their zoning laws; and Senator Catherine Cortez Masto has a bill to expand the supply of manufactured homes.
And the one I know this group really wants to hear about, Senators Reed and Hagerty’s Homebuyers Privacy Protection Act to end the abusive use of trigger leads marketing and protect prospective homebuyers’ personal information. I’m excited to support that bill when it is reintroduced.
For the industry, a good partner in government also means taking on corporate concentration and illegal price fixing in housing. That means standing up to private equity giants that gobble up homes by the block and price families out of their communities, and to predatory corporate landlords that price gouge families by using algorithmic price-setting software to push rents up even higher. I know you’re not immune to corporate concentration either: you’re all too familiar with consolidation among the credit reporting bureaus pushing credit reporting costs higher formortgage lenders. We need to solve this side of the problem too.
Lowering housing costs for families and giving every family the opportunity to own a home will require creative solutions and persistence from all of us, at all levels of government and across the housing industry. It will also require functional federal housing agencies and a strong economy. We have our work cut out for us.
I appreciate your partnership and look forward to working with you.
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