Factbox-US President Trump’s proposals to address living costs

WASHINGTON, Jan 20 (Reuters) – U.S. President Donald Trump is taking steps to address voter affordability concerns ahead of congressional elections this year by proposing major policy changes aimed at increasing home ownership and reducing living costs. Several of these proposals align Trump with Democratic lawmakers who have advocated for similar ideas in the past.

Trump is expected to provide more details on these proposals at the Davos meeting of global business leaders this week. However, economists have warned that while these policies may have significant implications for financial firms and investors, they may not necessarily lower living costs as intended.

Here is a breakdown of where the proposals currently stand:

CRACKING DOWN ON WALL STREET LANDLORDS
Earlier this month, Trump announced on his social media platform, Truth Social, that his administration plans to ban Wall Street investors from purchasing single-family homes in an effort to bring down home prices. While Wall Street investors owned about 3% of single-family rental homes in 2022, Trump did not provide specific details on how this ban would be enforced.

CREDIT CARD INTEREST RATE CAPS
In another surprising move via Truth Social, Trump proposed capping credit card interest rates at 10% for a year starting January 20. This unexpected proposal has caused turmoil in the financial industry, with lenders expressing concerns about the impact on credit availability. While the administration has not outlined how this cap would be implemented, White House press secretary Karoline Leavitt stated that Trump expects credit card companies to comply.

USING 401(K) PLANS FOR HOME DEPOSITS
White House economic adviser Kevin Hassett recently announced plans to allow retirement savers to use their 401(k) funds for house down payments. This initiative aims to provide more flexibility for individuals looking to purchase a home, although details on implementation are still being explored to ensure that retirement plans are not adversely affected.

MORTGAGE BONDS PURCHASES
Federal Housing Finance Agency Director Bill Pulte, at Trump’s direction, revealed that government-run mortgage finance giants Fannie Mae and Freddie Mac will purchase $200 billion in mortgage bonds to lower housing costs. This move has already led to a decrease in the average rate on 30-year fixed-rate mortgages. Pulte has also floated the idea of a 50-year mortgage to make homeownership more affordable, although critics argue that this could result in higher interest payments and delayed equity building.

HEALTHCARE PAYMENTS
Trump has proposed replacing government subsidies for health insurance with direct payments to consumers, a plan that some experts believe could negatively impact lower-income Americans. The White House outlined a legislative proposal aimed at reducing drug prices, insurance premiums, increasing cost transparency, and holding insurance companies accountable. However, given the current political landscape, passing significant healthcare legislation through a divided Congress may prove challenging.

Overall, Trump’s recent policy proposals signal a shift towards addressing affordability concerns for voters. While these initiatives may have far-reaching effects on the housing market, credit industry, and healthcare sector, their successful implementation and impact on living costs remain to be seen.