Trump Urges Fannie Mae, Freddie Mac to Push Builders on 2 Million Idle Lots

When Donald Trump, former President of the United States posted to Truth Social on October 5, 2025, he blasted big homebuilders for hoarding land and called on the government‑sponsored mortgage giants to force them into gear. He claimed they were sitting on "2 million empty lots, a record," and said that mobilising those parcels could help reverse the nation’s chronic housing shortage. The post quickly went viral, sparking debate in Washington, Wall Street and suburbia alike.

Why the housing market is at a breaking point

The latest data from the U.S. Census Bureau shows just 490,000 newly built homes on the market at the end of August 2025 – the lowest figure for the year and a 1.4 % dip from July. Months‑of‑supply ticked down to 7.4, down from 9.0 in July and well under the 8.2 level recorded a year earlier. Those numbers tell the same story that economists have warned about since the pandemic: inventory is shrinking while mortgage rates hover near 7 %, squeezing would‑be buyers.

Builders such as Lennar and D.R. Horton have tried to keep their pipelines moving by offering rate buydowns through captive lenders like Lennar Mortgage and DHI Mortgage. Yet demand remains tepid; many families can’t afford the monthly payments, and rental prices continue to climb in major metros.

Trump’s "American Dream Restoration" appeal

In the same Truth Social note, Trump linked his demand to the "American Dream Restoration" initiative, an executive order issued in January 2025 that tasks federal agencies with expanding affordable housing. He singled out Fannie Mae and Freddie Mac, whose new chairman is home‑building veteran Bill Pulte, to use their financing muscle to "push big homebuilders into action."

"They're my friends. They're very important to the success of our country," Trump wrote, drawing a controversial parallel between homebuilders and the oil cartel OPEC. "Now that they can get financing, they have to start building homes."

What the mortgage giants can (and can’t) do

Industry analysts quickly reminded Trump that Fannie Mae and Freddie Mac are primarily lenders, not developers. Their mandates focus on providing liquidity to the mortgage market, not directing where or how many homes get built. As (name omitted for brevity) of Goldman Sachs put it, "These GSEs can offer favorable loan terms, but they can’t force a builder to break ground on a vacant parcel."

Nevertheless, the agencies do have levers: they can tighten underwriting standards for loans tied to speculative land, offer lower‑cost financing for projects that meet affordability criteria, and prioritize lenders that work with builders who commit to building in high‑need areas.

• GSEs could expand the Home Affordable Refinance Program (HARP) to cover new‑construction loans.
• They might introduce a "land‑use credit" that rewards developers who sell homes at or below median income levels.
• Both agencies could require a percentage of new‑home financing to be allocated to regions with the most acute supply gaps.

Builders’ perspective: incentives vs. reality

Lennar’s CEO, Stuart Miller, told Bloomberg on October 4 that the company is already stretching its capacity. "We have a pipeline of roughly 30 million acres," he said, "but the economics have to make sense. If the market price doesn’t cover construction costs plus a reasonable return, holding land is the safer bet."

D.R. Horton’s chief financial officer, Jeff Hughes, echoed that sentiment: "We’re not sitting on 2 million empty lots, but we do have parcels that are strategically located far from where demand is strongest. Building in those spots doesn’t solve the affordability crisis and can actually erode profit margins."

Critics argue that the President’s demand for “hundreds of thousands of homes” ignores the fact that much of the idle land sits on the fringe of sprawling suburbs, where jobs, schools and transit are scarce. Housing where people actually want to live – inside established urban cores – is often already owned, not held as vacant farmland.

Potential ripple effects if the GSEs act

Should Fannie Mae and Freddie Mac adopt the tougher land‑use criteria suggested by some policymakers, smaller regional builders could see a sudden surge in available financing. That might translate into a modest uptick in starts, especially in the Midwest and South where land costs are lower.

On the flip side, a rapid shift could strain the GSEs’ balance sheets if a wave of low‑margin loans defaults. The 2022 housing crash taught regulators that overstretching mortgage‑backed securities can destabilise the broader financial system.

For consumers, the biggest hope is that more inventory would bring down listing prices and ease the bidding wars that have become the norm in cities like Austin, Phoenix and Charlotte.

What’s next: policy moves and market watch

Bill Pulte is expected to convene a round‑table with the top five homebuilders and senior officials from the Department of Housing and Urban Development by mid‑November. The meeting will reportedly focus on aligning GSE incentives with the “American Dream Restoration” goals.

Congressional committees on housing and finance have already scheduled hearings for early December to examine the President’s demand and the GSEs’ authority. Lawmakers on the House Financial Services Committee are drafting a bill that would give Fannie Mae and Freddie Mac limited powers to earmark a portion of their loan portfolios for new‑construction projects in designated affordability zones.

Meanwhile, market watchers will be tracking the next few months of builder permits. If the permit data shows a noticeable rise after the GSEs announce new programs, it could signal that Trump’s post has nudged the industry.