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Want more housing market stories from Lance Lamberts ResiClub in your inbox? Subscribe to the ResiClub newsletter. Last month, new Treasury Secretary Scott Bessent said that the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) could get released from government conservatorship if doing so doesnt push up mortgage rates. Right now the priority is tax policyonce we get through that, then we will think about that [ending conservatorship]. The priority for a Fannie and Freddie release, the most important metric that Im looking at is any study or hint that mortgage rates would go up. Anything that is done around a safe and sound release [of Fannie Mae and Freddie Mac] is going to hinge on the effect of long-term mortgage rates, Bessent said. While some in the Trump administration have alluded to an interest in ending the conservatorship of Fannie Mae and Freddie Mac, Trump and Bessent also earlier expressed interest in bringing down long-term rates and yields. Bessent suggests that their goal of lowering mortgage rates could take precedence over releasing Fannie Mae and Freddie Mac from conservatorship. Fannie Mae and Freddie Mac, which support the mortgage industry by buying mortgages from lenders and selling mortgage-backed securities to investors, were placed into conservatorship by the Federal Housing Finance Agency (FHFA) in September 2008. That was after they suffered massive losses during the housing crash, which threatened the stability of the U.S. financial system. The U.S. Treasury provided a bailout to keep them afloat, and they have remained under government control ever since, despite returning to profitability. While the U.S. Treasury owns the majority of their profits through senior preferred stock agreements, the common and preferred shares that existed before conservatorship were never fully wiped out. Immediately following Trumps November election win, the stock prices of Freddie Mac and Fannie Mae both soared and the market started to price in higher odds of conservatorship coming to an end. To better understand what the end of conservatorship for Freddie Mac and Fannie Mae could mean for the housing market and mortgage rates, ResiClub reached out to Moodys chief economist Mark Zandiwho has published several reports (including in 2017 and 2025) on how the end of conservatorship could impact financial markets. Zandi provided ResiClub with his odds for five scenarios and how each could impact mortgage rates, including whether the government offers an “implicit” or “explicit” guarantee of Fannie and Freddie. An “explicit guarantee” means the government formally guarantees Fannie Mae and Freddie Mac’s obligations, ensuring that investors will be repaid no matter what. This reduces risk for investors, leading to lower mortgage rates. An “implicit guarantee” means the government does not commit to backing the GSEs, but markets assume it would intervene to prevent failure. (This was the case before the 2008 financial crisis when investors believed the government would rescue the GSEs if needed.) Since theres no formal guarantee, this scenario can lead to higher borrowing costs because investors demand extra compensation for the uncertainty. 1. Conservatorship status quo remains in place: 65% probability The status quo with the [Government-Sponsored Enterprises] remaining in conservatorship is the most likely scenario,” Zandi tells ResiClub. “This is the most likely scenario as it is consistent with the status quo and current mortgage rates. The housing finance system has worked very well since the GSEs were put into conservatorship in 2008. And the GSEs have been effectively privatized through their credit risk transfers to the private sector. Those advocating for taking the GSEs out of conservatorship need to explain what the benefit of privatization is. 2. Release of Freddie Mac and Fannie Mae with an “implicit government guarantee”: 20% probability Release of the GSEs as systemically important financial institutions (SIFIs) with an implicit government guarantee like that which prevailed prior to the GSEs conservatorship,” says Zandi. “This is going back to the future, and while the GSEs will be better capitalized and with a much smaller and less risky balance sheet than when they failed, global investors will be highly wary of this approach, pushing mortgage rates up 20-40 basis points compared to the status quo for the typical borrower through the business cycle. Given the nightmares this will conjure up, it is a less likely scenario. 3. Full release of Freddie Mac and Fannie Mae without an “implicit” or “explicit” government guarantee: 10% probability This would add an estimated 60-90 basis points to 30-year fixed mortgage rates compared to the current status quo for the typical borrower through the business cycle,” Zandi projects. “Without a government guarantee, the Federal Reserve would not be able to buy the GSEs [mortgage-backed securities], and there is the risk that the rating agencies would downgrade the GSEs debt and securities. The GSEs share of the mortgage market would significantly decline, and it would increase for private lenders and the [Federal Housing Administration], resulting in greater taxpayer exposure, as taxpayers bear all the risk in FHA loans. 4. Release of Freddie Mac and Fannie Mae with an “explicit” government guarantee: 5% probability Release of the GSEs with an explicit government guarantee would result in a small decline in mortgage rates (as much as 25 basis points) compared to the current status quo. But this is not likely as it would require legislation that would be difficult and [nearly] imossible to pass, says Zandi. 5. Freddie Mac and Fannie Mae fully chartered as government corporations: 0% probability [If the] GSEs are chartered as government corporations (much like Fannie pre-1968) with an explicit government guarantee, [this] would effectively codify the current status quo to get the full faith and credit guarantee of the federal government. This would result in the lowest mortgage rates, but also requires legislation and is not at all likely in a Trump administration, says Zandi. While the Trump administration is interested in releasing Freddie Mac and Fannie Mae from conservatorship, it is also sensitive to any increase in mortgage rates. Given this concern and the evidence presented by Moodys, it is fair to assume that the administration will proceed with caution over the next year. If conservatorship does end, it is likely to happen later in the Trump administration, once concerns around mortgage rates have been addressed.
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The last year has seen a global reckoning with the effects of social media on kids. Australia banned children younger than 16 from using social media platform. Jonathan Haidts The Anxious Generation became one of the most purchased books of 2024. And former U.S. Surgeon General Vivek Murthy called for these platforms to create warning labels akin to those on tobacco products. Despite wide acceptance that social media can contribute negatively to childrens social and emotional well-being, families, schools, and governments have no interest in pretending these platforms will eventually fade into obsoletion. Instead, many of these entities are interested in reevaluating and placing guardrails around how children engage with online platforms. At the Fast Company Grill at SXSW earlier this month, executives from Life360, Yondr, and Yotoall tech companies that emphasize finding balance between the online and offline worldaddressed the nuances of when and how children should engage with social media. Tom Ballhatchet, vice president of creative, UX, and innovation at Yoto, is adamant that his business is not anti-tech. The companys signature product, the Yoto Player, is an audio-forward device that users can insert physical cards into to listen to stories, podcasts, music, and more. Other than a tiny display which might show illustrations or cartoon figures, the gadget is completely analog, allowing children to engage with content without the distraction of a screen. Were trying to put kids in control of their listening and learning and education, Ballhatchet said. Parents often tell us that because their kids are in control, that actually gives them a bit of independence back.” Lauren Antonoff, the chief operating officer of Life360, a platform that allows families to keep track of one anothers whereabouts, echoed the idea that technology can be used to facilitate independence. Life360 isn’t designed to be used actively on your phone,” Antonoff said. “It’s designed so that you can put your phone in your pocket and go out and play ball, or go to the store, and your parents can keep an eye on you.”Jennifer Betka, the chief marketing officer of Yondr, a company that makes pouches used to store phones for schools and event venues, wants children to learn about the digital world and what it looks like to practice safe behavior, while preventing overexposure and addiction to these platforms at a young age. The next generation should really be able to live life untethered and strike a healthy balance between their screens and the world around them, she said. Watch the full panel below:
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Filling an empty gas tank in an SUV might take five or six minutes. A new electric SUV from Chinas BYD can charge its battery in roughly the same amount of time, using one of the companys new EV chargers. Thats a major step forward. It is certainly a feat of engineering to design a battery that can handle this kind of charging speed, says John Helveston, an engineering management professor at George Washington University who studies technological change in China’s EV industry. Tesla does not have battery technology anywhere near this. (BYD’s charger has twice the power of Teslas latest supercharger.) The tech inside BYD’s newest cars, which will soon roll out, can handle 1,000 volts of power. The company’s new EV chargers, meanwhile, are designed to match that, so 249 miles of range can be added to a vehicle in five minutes. BYD now plans to build 4,000 of the new chargers across China. [Image: BYD] In the U.S., many consumers still say theyre hesitating to buy an electric car because of the time they take to charge. Of course, for daily use, many drivers could charge at home, and the range on current EVs is far greater than the typical commute to work. But until a shift happens in consumer perception of how to use a carand for longer-distance drives, or anyone who lives in an apartment without easy access to chargersbetter charging options could be crucial in helping EVs scale up more quickly. China is far ahead of the rest of the world on EV battery tech. “It’s the result of a series of different factors, including strong industrial policy support by China’s government to build out the upstream material supply chain for over a decade now,” says Helveston. (Trump’s current anti-EV policy, meanwhile, is likely to push the U.S. farther behind.) Innovative companies like BYD, he says, are also at the forefront of battery science. The technological development is happening incredibly quickly. “The comparison I hear is that if you have a new charging platform or a new battery chemistry, Volkswagen and BMW will say, ‘Well hustle to put this into our systems, and well put it in five years from now.’ Tesla might say, ‘Well hustle and get it in a year from now.’ China can say, ‘Well put it in three months from now, Dan Wang, a researcher of Chinas technology industry and a fellow at the Paul Tsai China Center at Yale Law School, recently told Heatmap. Installing new tech is also faster. “In China, it is much easier to get approvals and install chargers that can handle these kinds of high-power chargers more quickly, mostly because you only have one entity to work witha state-owned power company,” says Helveston. In the U.S., by contrast, installing high-powered chargers takes more coordination between different players, which means it takes more time and ends up costing more. Chargers that use so much power could put a strain on the electric grid if they’re not managed correctly. If everyone charges at the same time when they’re headed home from work, that could be a problem. On the other hand, if some people use an ultrapowerful charger in the middle of the day, that could actually help grids with extra solar power that might otherwise go unused. As with the charging tech itself, what’s happening with grid management in China could also be a model for the U.S. “Certainly, it is in general better and easier to manage if most EV owners slow charge over longer periods of time, but we are moving to a future where fast charging is just going to be part of the ecosystem,” says Helveston. “Given the level of innovation happening in China’s EV sector, I expect the Chinese grid to be able to develop the technology and processes to better handle these kinds of demands on the grid much more quickly than places like the U.S.”
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