President Donald Trump is calling on government-sponsored mortgage financers Fannie Mae and Freddie Mac to create incentives for homebuilders, suggesting that millions of lots are staying idle while the nation faces a shortage of affordable homes.

In an Oct. 5 post on Truth Social, the president indicated that “Big Homebuilders” are fueling the country’s housing affordability problem.

“Before I became President, OPEC kept oil prices high. It wasn’t right for them to do that but, in a different form, is being done again—This time by the Big Homebuilders of our Nation,” Trump wrote.

“They’re my friends, and they’re very important to the SUCCESS of our Country, but now, they can get Financing, and they have to start building Homes. They’re sitting on 2 Million empty lots, A RECORD. I’m asking Fannie Mae and Freddie Mac to get Big Homebuilders going and, by so doing, help restore the American Dream!”

Trump’s comments come as home prices continue to climb while sellers retreat from the market. As of August, the median home sale price was $440,004, up 1.7 percent from a year earlier, according to real estate brokerage Redfin. New listings fell by 1.1 percent from July, the lowest seasonally adjusted level since January 2024, as more sellers pulled back amid sluggish buyer demand.

Meanwhile, builder sentiment has stagnated. The National Association of Home Builders (NAHB) reported that builder confidence for newly built single-family homes remained flat in September, at 32 (on a scale from zero to 100), the lowest since December 2022. U.S. Census Bureau data also show that housing starts, or the number of brand-new homes that began construction in a given month, dipped by 8.5 percent in August from a month earlier, to a seasonally adjusted annual rate of 1.307 million units.

“Housing affordability is hurting buyer traffic for builders, and as a result builders have slowed single-family home construction,” NAHB Chairman Buddy Hughes said.

It’s not immediately clear what specific actions Trump expects Fannie Mae and Freddie Mac to take. The primary function of the two enterprises is to provide liquidity to the mortgage market by purchasing loans from lenders and packaging them into mortgage-backed securities (MBS), for which they guarantee the timely payment of principal and interest to investors who might not otherwise invest in mortgages. This process frees up lenders’ capital, allowing them to extend additional credit to homebuyers.

By broadening the pool of funds available for housing finance, Fannie Mae and Freddie Mac can help keep mortgage rates lower and make credit more accessible. Observers have noted that lower mortgage rates—rates are already edging down as markets anticipate further Federal Reserve rate cuts—could increase homebuilding by making construction and land development loans more affordable.

“Our latest survey shows builders reported an increase for future market expectations as mortgage rates have posted a modest decline in recent weeks,” Hughes said ahead of a Sept. 17 Fed meeting, during which the central bank cut interest rates by a quarter percentage point.

Robert Dietz, NAHB’s chief economist, said of the Fed’s rate cut, “This return to monetary policy easing will help the mortgage market indirectly and lead to lower interest rates for building and land development loans, which will help builders to boost housing production.”

Fannie Mae and Freddie Mac have remained under federal conservatorship since 2008, when they received a nearly $200 billion taxpayer bailout after a surge in mortgage defaults sent the value of MBS plunging and triggered the global financial crisis.

Critics have argued that continued government backing of Fannie Mae and Freddie Mac distorts the housing market and drives up home price inflation, while supporters counter that their role is essential to keeping mortgage financing stable and accessible.

In May, Trump said he is working to move Fannie Mae and Freddie Mac out of conservatorship and back into private control while maintaining an implicit government guarantee on their obligations and securities.

“I am giving very serious consideration to bringing Fannie Mae and Freddie Mac public,” he said at that time. “Fannie Mae and Freddie Mac are doing very well, throwing off a lot of CASH, and the time would seem to be right.”