Billionaire Bill Ackman’s large housing betting may produce a Domino brand effect

During the Great Depression, it is estimated that 15 million US people have unemployed, and about 4 million houses have been canceled.

After the extensive supervision reform of the financial crisis in 2008, the federal government placed Fanrima and Fredi Mac in the scope of financial protection to help the housing market recovery and improve the institution to improve the financial situation.

Fannie Mae and Freddie Mac are traditionally sponsored by the government (GSE). The two organizations aims to improve the process of housing burdens by purchasing mortgage loans from the loan party.

BleakDon’t miss this move: Free daily newsletter subscribed to theSTREETBleak

Bill Ackman, the founder of Panxing Square Capital Management Company, suggested that these organizations are no longer needed under the control of the federal government, Donald Trump should be private by 2026 Turn them.

Ackman -If privatization, they will pass the strong status of more than $ 1 billion in Persnie Mae and Freddie Mac through the Persnie Mae and Freddie Mac Investigation, this is a strong supporter who revoked these debts from the government’s balance sheet.

However, the privatization of Fannie Mae and Freddie Mac may have a terrible impact on the market stability established within 15 years since the housing crisis, and the housing crisis.

Eliminating the federal guarantee mortgage loan may mean the fragile housing market

When Trump was first elected, he enjoyed a more favorable housing market. In January 2017, the average interest rate of mortgage loans was 4 %, while the mortgage rate rate of this month had exceeded 7 %. During the first term, President Trump failed the privatization of Freddie Mac, Freddie Mac, and failed due to the risks brought about by stable and prosperous housing markets.

Experts predict that the second attempt of the organization of privatization can further subvert the housing market by increasing the interest rate of mortgage loans and exacerbating the current ride of the market.

Although some people have speculated that privatization will eliminate 30 years of fixed interest rate mortgage loans, some experts point out that this is unlikely that this is a loss, which will immediately deteriorate the housing market and damage Trump’s preferentiality.

More information about buying houses:

• Housing experts reveal the surprising way to reduce the interest rate of mortgage loans
• When Americans buy a house, they may see the changes in major housing costs in 2025
• Dave Ramsey warned Americans to buy a house now

Although Fannie Mae and Freddie Mac were private institutions before 2008, they still carried the federal government mortgage loan guarantee.

Susan Wachter, a professor of real estate and finance at the University of Pennsylvania’s Wharton School of Business, pointed out that these organizations have never stayed in protection forever. She said: “The law said that they will eventually be privatized, but the bet is high for how to do this work.”

If the Trump administration has successfully privatized Freddie Mac, the housing market may have some overflow effects.

Higher mortgage interest rate: The federal government supports all the mortgage loans obtained through FANNIE MAE and Freddie Mac, thereby reducing the risk of investing mortgage support securities. The federal guarantee effectively transferred loan risks to the government, allowing consumers to enjoy the low interest rate of the loan of the lender.

However, if Trump wants to privatize these organizations, the mortgage interest rate will increase, especially for high -risk borrowers, because Femime and Fredi Mike cannot provide the same government guarantee.

More stringent loan requirements: If buyers only rely on private lenders without federal support, the parameters of mortgage loans will become more difficult. The borrower will require higher credit scores, bigger payment and more mortgages to get approval to reduce the risk measurement standards of the lenders.

Low market demand and lower housing prices: The less mortgage loan approval will eventually lead to a reduction in market activities, because buyers will not be able to close their houses without the mortgage loan.

The stagnant house sales will eventually reduce house prices, which will benefit buyers who can get mortgaged. However, this will not help low -income buyers who cannot obtain loan approval. The combination will only increase the gap between ownership of the house.

Ackman (Ackman) will win a lower -regulated housing market

In the call of the Trump administration released on January 16th, ACKman estimates that by the end of 2026, Fannie MAE’s stock price will reach $ 35 in the IPO, and Freddy Mike will be (Freddie Mac.

Related: Fed Chairman Jerome Powell issued warning inflation and weak housing market

Since the election, the stocks of these two housing institutions have risen, and they were initially increased in the initial announcement of Ackman at X in December (previously known as Twitter), but they have plummeted recently. Fannie Mae fell to $ 5.56 per share, and Freddie Mac’s stock fell to $ 5 last week.

Historically, the stock price of these two organizations has always fluctuated, with relatively low returns, and may inspire ACKMAN to bid to privatize Mini and Fredi.

Akman said in X’s post: “We have owned Fangrimi and Fredi Murtapho for more than ten years. Today, they have traded at our average cost. They are not great investment.

If Trump has ended the Federal Protection Agency and Fanrima and Fredi Mike become a private entity, Panxing Square will receive more than $ 900 million in income.

Housing experts pointed out that it is not to create the protection measures for the organization to control the organization indefinitely. However, in the housing market that faces low inventory, stubborn mortgage interest rates and general burdens, the mortgage loan process and transfer the cost burden to borrowers may take risks at best, and the worst situation is catastrophic.

Related: Senior fund manager issued Dire S & P 500 warning 2025