Maintenance and renovations aren't keeping up with the nation's aging housing stock, creating an influx of obsolete properties that's adding further strain to an already tight inventory of homes for sale.
Craig Phillips, a top aide to Treasury Secretary Steven Mnuchin, said his department "broadly" agrees with the FHFA plan, which would return Fannie Mae and Freddie Mac to the private market and provide them an explicit government guarantee.
A House Republican tax proposal that infuriated housing groups and sent homebuilder stocks sliding would only have a modest impact on the market for new homes and could end up being a net positive for the industry, according to Keefe, Bruyette & Woods analysts.
Hopes that tax reform might soften a weakening of the mortgage interest deduction were quickly dashed as the GOP plan landed a double punch on the incentive cherished by the mortgage and housing industries.
FHFA Director Mel Watt warned Thursday that to prevent a potential draw on the Treasury Department by the government-sponsored enterprises, he is willing to act unilaterally to rebuild capital at Fannie and Freddie.