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The Ideology Behind the Nation’s New Chief Housing Economist

March 21, 2025

Friday, March 21, 2025

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  • Housing chief: How America’s new chief housing economist will guide the administration may be revealed through his past research.

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The Trump administration has appointed Morris Davis as the chief housing economist for the White House Council of Economic Advisers. A longtime faculty member at the Rutgers Center for Real Estate, Davis has authored numerous influential papers on housing and government policy. His research provides insights into how he may advise the White House on future housing policies.

Trump has stated that reducing housing costs is a priority for his administration, even issuing an executive order for emergency price relief on goods to “lower the cost of housing and expand housing supply.” Davis' 2012 paper, Questioning Homeownership as a Public Policy Goal, critiques the effectiveness of subsidizing large mortgage entities like Fannie Mae and Freddie Mac to lower mortgage interest rates. He argues that such subsidies have been ineffective because these entities have only a marginal impact on mortgage rates, which are essentially uncorrelated with homeownership rates.

Trump has also discussed privatizing Fannie Mae and Freddie Mac, and new FHFA chairman William Pulte is moving quickly in that direction. Thursday, he reportedly fired the CEO, COO, and head of HR at Freddie Mac, along with the COO and head of HR at FHFA, following his decision earlier this week to place dozens of employees on leave. Davis is likely to support reducing federal oversight of these institutions.

Davis may also influence tax policy, particularly regarding the mortgage interest deduction. Trump has proposed cutting this deduction in his upcoming tax overhaul, a move Davis might endorse. In his paper, Davis notes that the mortgage interest deduction primarily benefits individuals with above-median incomes who would likely be able to buy a home regardless. The administration’s focus on fiscal responsibility aligns with Davis' calculations that privatizing Fannie Mae and Freddie Mac and ending the mortgage interest deduction could save taxpayers approximately $2.5 trillion.

Housing plays a crucial role in Americans' wealth, inflation, and household expenses. The administration's approach to housing policy will have significant effects on the real estate industry and the broader economy. If Davis maintains the perspectives from his past research, substantial changes to government support for homeownership may be on the horizon.

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