Federal Housing Finance Agency Director Bill Pulte has spoken out against share repurchases made by homebuilders, according to the Wall Street Journal.
Pulte’s admonition is the Trump Administration’s latest dart thrown for housing affordability and it follows a similar push by the administration against buybacks in the defense sector.
Companies often repurchase stock after allocating funds for internal investments and expenses, according to the Real Deal. Repurchasing stock can provide an opportunity to give money to investors and often leads to a bump in the stock price.
Pulte and other critics said, however, that companies should be spending available funds to assist consumers, such as by lowering home prices. Pulte is himself a homebuilder, and he said that companies were purposely keeping home prices elevated.
“Our preference is to use carrots, but sticks are on the table,” Pulte said about penalizing those who run afoul of the administration’s mission, particularly those that rely on financing from Freddie Mac or Fannie Mae; the FHFA regulates those enterprises and each is chaired by Pulte.
Pulte Says to ‘Do the Right Thing’
Homebuilders “need to do the right thing by the American people if they’re going to have access to our liquidity,” Pulte said.
Determining the impact of buybacks on housing affordability is difficult, but there’s no doubt that the top public homebuilders delved heavily into the repurchasing market last year. During their last fiscal years, Arlington, Texas-based D.R. Horton and Miami, Florida-based Lennar spent $4.3 billion and $1.7 billion on buybacks, respectively.
The Atlanta-based PulteGroup, which the FHFA director used to be on the board of, repurchased $900 million in stock in the first three quarters of its most recent fiscal year.
The Real Deal reported that the Trump administration is increasingly becoming interested in pursuing avenues towards affordability as it is becoming one of the top issues ahead of the 2026 midterm elections.
In recent weeks, the administration has made proposals for Fannie and Freddie to buy up to $200 billion in mortgage-backed securities and a plan to ban large institutional investors from buying more single-family homes.
The post FHFA Director Admonishes Homebuilders Against Stock Buybacks first appeared on The MortgagePoint.
