Trump Could Unfreeze the U.S. Housing Market With One Mortgage Reform America Should Have Adopted Years Ago
President Donald Trump is searching for ways to accelerate an American economy being squeezed by expensive housing, stubborn mortgage rates and a real estate market in which millions of homeowners have effectively been financially punished for moving. One potentially powerful solution does not require another massive stimulus bill, government checks or artificially forcing the Federal Reserve to slash interest rates. America could make mortgages portable.
The idea is remarkably straightforward. Instead of forcing homeowners to surrender an existing low mortgage rate whenever they sell their house, qualified borrowers could carry the rate, remaining term and outstanding balance of their mortgage to their next primary residence. If the new house requires additional borrowing, only the additional money would need to be financed at today’s market rate.
This is not some untested financial theory. Mortgage portability already exists in major developed housing markets including the United Kingdom and Canada, where lenders openly advertise the ability to take qualifying mortgage products from one home to another. America, meanwhile, has constructed a housing finance system in which millions of homeowners who responsibly locked in historically low rates during the pandemic-era refinancing boom now face an enormous financial penalty if they move.
The result is a nationwide mortgage lock in problem that researchers have now measured. National Bureau of Economic Research economists Jack Liebersohn and Jesse Rothstein found that rising mortgage rates reduced mobility among mortgaged homeowners by approximately 16% during 2022 and 2023 and generated an estimated $20 billion in economic deadweight loss. Their research estimated roughly 800,000 moves were discouraged during just a 15 month period.
Even newer NBER research published in May 2026 paints an increasingly dramatic picture. Researchers found that existing home sales fell roughly 40% between 2022 and 2024 and estimated that mortgage lock-in increased aggregate house prices by 4.4% and rents by 1.5% relative to a counterfactual without the lock in effect. America has effectively built financial walls around millions of homeowners. Portable mortgages could knock a large hole through them.
America’s Housing Market Has a Golden Handcuffs Problem
Imagine an American family bought or refinanced its house when mortgage rates were around 3%. The family has since grown, one spouse receives a better job offer in another city or aging parents now require them to relocate closer to home. Under America’s traditional mortgage system, selling the house generally means paying off the existing mortgage, causing the family’s extraordinarily valuable 3% financing to disappear with it.
They then enter today’s market and finance the replacement house at prevailing rates. Even if the new property costs roughly the same amount, the financing expense can be dramatically higher. That changes the homeowner’s calculation from “Would we rather live somewhere else?” to “Can we afford to give up our mortgage?” Millions of Americans understandably answer no.
NBER researchers quantified just how powerful that incentive has become. They found that each percentage-point increase between a homeowner’s existing mortgage rate and prevailing market rates was associated with a 7.7% decline in that borrower’s quarterly probability of moving. The same research calculated the present value of the mortgage “payment gap” at approximately $49,000 per mortgage during the final year of its sample, representing approximately $215 billion across moving households. That is not merely a housing market inconvenience. It is an economic distortion created by a financing system that increasingly determines whether Americans can afford to relocate.
“This is how Trump can outsmart the Fed without waiting around for interest rates to fall. Let Americans take the mortgage rates they already earned with them when they move. Suddenly millions of homeowners aren’t trapped in their houses anymore. You unlock inventory, unleash home sales, increase labor mobility and pour money into movers, contractors, furniture stores, real estate companies and local businesses. Trump wouldn’t have to print a trillion dollars or beg the Fed for a rate cut, just give Americans ownership of the mortgage terms they’re already paying for. If he pulls that off, homeowners across this country will love him for it.”
— Patrick Zarrelli
The United Kingdom Already Shows How Mortgage Portability Can Work
Americans do not have to imagine what mortgage portability would look like because major British lenders already offer versions of it. Nationwide explains mortgage porting in remarkably simple terms: an existing customer moving homes may be able to take the existing mortgage product and interest rate to the new property. The borrower still has to qualify under current lending criteria, and the replacement property still has to satisfy underwriting requirements.
That distinction is important. Mortgage portability does not have to mean somebody automatically carries debt onto any property they choose without underwriting. The borrower can still be evaluated, the collateral can still be appraised and loan to value requirements can still apply. What changes is the financial punishment for moving.
If a Nationwide borrower needs additional money for a more expensive house, the existing balance can retain its ported mortgage product while the additional borrowing receives a new product at prevailing terms. Lloyds offers a similar portability structure, explaining that porting can allow qualifying borrowers to retain an existing mortgage interest rate when moving and potentially avoid early repayment charges when the relevant mortgage amount is transferred. In other words, this is not exotic finance. Banks elsewhere already know how to do it.
Canada Does It Too
Canada provides another useful example. RBC Royal Bank explicitly offers homeowners the possibility of transferring qualifying mortgages from one home to another. According to RBC, portability can allow homeowners to transfer aspects of their existing mortgage to a replacement property, subject to the lender’s eligibility requirements, timing restrictions and underwriting.
Again, portability does not eliminate underwriting. It changes the unnecessary assumption that an otherwise performing financing arrangement must automatically disappear simply because the collateral address changes. That distinction could fundamentally change American housing mobility. A borrower who remains creditworthy and can provide acceptable replacement collateral should at least have the opportunity to preserve qualifying financing instead of being automatically pushed into an entirely new market-rate mortgage.
Congress Is Finally Taking the Idea Seriously
The concept has begun moving from economic debate into American policymaking. On August 3, 2026, Republican Rep. Tom Kean Jr. of New Jersey announced legislation specifically designed to expand portable mortgages in the United States. The Making Ownership Viable for Everyone Act, appropriately called the MOVE Act, would push Fannie Mae and Freddie Mac toward supporting portable mortgages through the secondary market. That is significant because portability will be difficult to scale nationally unless America’s enormous mortgage securitization infrastructure can accommodate it. Kean identified precisely the problem confronting homeowners:
“I have heard directly from residents across our state who feel stuck in homes that no longer meet their needs because moving would mean giving up their mortgage rate.”
His legislation attacks the problem where American mortgage finance actually operates: the secondary mortgage market. America’s housing finance system is not simply a private arrangement between a neighborhood bank and a homeowner. Fannie Mae, Freddie Mac, federal regulators, mortgage servicers, securities investors and private lenders form an enormous interconnected financing machine. If policymakers want portability to become commonplace, changing the secondary-market rules could be one of the most consequential places to start.
Trump Should Put Portable Mortgages at the Center of His Housing Agenda
The Trump administration should take the proposal seriously and aggressively investigate what the Federal Housing Finance Agency, Fannie Mae and Freddie Mac can legally accomplish administratively while Congress considers the broader statutory changes necessary to establish nationwide portability.
There is an important legal distinction: a president cannot simply sign an executive order and magically rewrite every privately held mortgage contract in America. Existing contracts, mortgage backed securities, investor rights, federal statutes, underwriting standards and the authority Congress has delegated to federal agencies all matter.
But that does not mean the White House is powerless. Presidential administrations can establish policy priorities, direct executive-branch agencies to examine reforms, propose regulatory changes where statutory authority permits, work with FHFA and the government-sponsored enterprises, and pressure Congress to modernize federal mortgage law. The objective should be straightforward: make portability a standard feature of qualifying American mortgages going forward while developing a legally workable mechanism for extending portability to as much of the existing mortgage market as possible. If Congress needs to change federal law to accomplish the full reform, Congress should change it.
This Could Be Economic Stimulus Without Another Trillion Dollar Spending Bill
The political appeal should be obvious. Traditional economic stimulus frequently requires Washington to borrow or spend enormous amounts of money. Mortgage portability attacks an existing economic friction instead. The NBER’s estimated $20 billion deadweight loss illustrates the point. Americans are already willing to move. Some would prefer different houses, cities or jobs, but the financing system prevents otherwise mutually beneficial transactions from occurring. Remove that obstacle and substantial economic activity can occur naturally.
A homeowner lists a house, another family buys it and the original homeowner purchases another property. That transaction creates business for real estate agents, inspectors, appraisers, title companies, mortgage professionals and movers. New owners frequently renovate, replace appliances, purchase furniture, landscape properties and hire contractors. One unlocked homeowner can become part of an entire chain of transactions and secondary spending. Multiply that across a national housing market and portability begins looking less like an obscure mortgage reform and more like economic infrastructure.
Portable Mortgages Could Release Housing Inventory
America’s housing affordability crisis is often discussed entirely as a shortage of homes. America certainly needs additional construction, particularly in high demand metropolitan areas where zoning restrictions, land constraints, permitting delays and infrastructure limitations have restricted supply. But another shortage is happening simultaneously: existing homes that owners might otherwise sell are not reaching the market.
NBER research found that mortgage lock in suppresses both housing supply and demand because homeowners who refuse to sell also generally do not purchase replacement homes. Particularly important are would be downsizers who remain in larger properties because moving would mean surrendering favorable financing. That jams the entire housing ladder. An older couple remains in a four-bedroom house because downsizing into a smaller property at a much higher mortgage rate makes little financial sense. The growing family that could use the four-bedroom house cannot buy it because it never reaches the market. The owner of the smaller starter property cannot move up, and the first-time buyer remains a renter.
The problem cascades through the housing system. Portability attacks that blockage directly by allowing homes to circulate without forcing every existing homeowner to sacrifice the financing that made their current housing affordable.
It Could Help Moderate Home Prices Without Destroying Homeowners’ Equity
The Federal Reserve’s traditional weapon against inflation is raising interest rates, but housing demonstrates how that mechanism can create contradictory effects. Higher mortgage rates reduce purchasing power and should theoretically weaken housing prices, yet those same rates discourage existing homeowners from selling, constricting supply. The 2026 NBER study modeled this effect and estimated that mortgage lock-in raised aggregate home prices approximately 4.4% relative to a world without lock in. It also estimated rents were approximately 1.5% higher.
That is an extraordinary finding because it illustrates how the same high rates intended to cool demand can simultaneously prevent supply from reaching the market. Portable mortgages would not magically solve America’s housing shortage, and additional construction would still be necessary, but portability could allow existing housing stock to circulate more efficiently rather than leaving millions of properties economically frozen.
It Would Restore American Labor Mobility
Housing policy is also labor policy. An employee offered a substantially better job several states away should be deciding whether the salary, career opportunity and new city make sense. Today, another variable can dominate that calculation: the mortgage. Someone holding a 3% mortgage may discover that accepting a better job requires replacing that mortgage with financing costing dramatically more. A nominal salary increase can disappear into additional housing costs, turning an otherwise productive career move into a financial setback.
NBER researchers explicitly identify foregone employment opportunities as one source of the economic inefficiency created by mortgage lock in. Portable mortgages could therefore make the American labor market more efficient by allowing workers to move toward better opportunities without automatically forfeiting one of the most valuable financial contracts they possess. For an economy competing globally for talent, productivity and investment, geographically trapping workers because of mortgage mechanics makes little economic sense.
Why Doesn’t America Already Do This?
This is where the structure of American mortgage finance becomes critical. The United States built an extraordinary secondary mortgage market around securitization. Mortgages are originated, pooled and transformed into mortgage-backed securities purchased by investors around the world. That system helped make America’s unusually long 30 year fixed rate mortgage widely available, but it also means changing mortgage behavior can affect investors who purchased securities based partly on assumptions about how quickly those loans will be repaid.
When a homeowner sells a property, the existing mortgage is normally paid off. If that borrower holds a low-rate mortgage during a higher rate environment, repayment removes that low yielding loan from the pool. Portability could change that behavior by allowing a 3% mortgage that otherwise would have been repaid to remain outstanding against approved replacement collateral.
That creates legitimate technical questions involving mortgage duration, prepayment assumptions, servicing, collateral substitution and securities pricing. Those are financial-engineering problems. They are not a compelling reason to freeze American families in their houses.
Wall Street’s Mortgage Machine Should Serve the Economy, Not the Other Way Around
America learned an extraordinarily expensive lesson during the 2008 financial crisis about what happens when mortgage finance becomes detached from the interests of homeowners and the stability of the broader economy. The answer is not to destroy securitization. America’s mortgage backed securities market performs an important economic function by connecting enormous pools of investment capital with residential lending. But the system exists to finance American housing. American housing should not exist primarily to preserve every assumption embedded in a Wall Street securities model forever.
If mortgage backed securities need new structures to accommodate portability, policymakers and financial engineers can design them. If investors require compensation for altered duration risk, policymakers can examine portability fees or other pricing mechanisms. If additional borrowing must occur at market rates, structure the product that way. If underwriting must be repeated when collateral changes, require it.
The United Kingdom and Canada demonstrate that portability and prudent lending are not mutually exclusive. The answer to a solvable securities problem cannot permanently be that millions of Americans should remain financially trapped.
The American Mortgage Is Already a Government Shaped Product
There is also something deeply misleading about treating today’s mortgage architecture as though it emerged from a completely untouched free market. The American housing finance system is profoundly shaped by federal policy. Fannie Mae and Freddie Mac purchase enormous volumes of residential mortgages. Federal Housing Administration programs insure loans. The Department of Veterans Affairs guarantees qualifying mortgages. Federal banking regulators establish capital and safety requirements, while federal statutes govern important elements of mortgage servicing, transfers and securitization.
Even the 30 year fixed rate mortgage Americans consider normal is deeply intertwined with federal housing policy and the secondary mortgage market. Washington already helped design the system. Washington can redesign the parts that no longer work.
The Due on Sale System Deserves Another Look
One important obstacle is the due on sale structure built into American mortgages. When mortgaged property is transferred, lenders generally retain contractual authority to demand repayment of the outstanding loan, subject to exceptions established under federal law. The Garn St. Germain Depository Institutions Act of 1982 established the modern federal framework governing enforcement of due on sale clauses.
That architecture helped shape the mortgage market America has operated for decades, but Congress is allowed to reconsider laws when economic circumstances and financial markets change. A carefully designed portability framework for qualified owner occupied primary residences could preserve underwriting protections while eliminating the automatic destruction of favorable financing simply because a responsible borrower changes addresses. The borrower remains responsible for the debt, while the lender receives newly approved collateral securing it.
That is the conceptual shift: the mortgage becomes portable without becoming reckless.
Portability Doesn’t Mean Giving Someone a 3% Mortgage on a Mansion
Critics will inevitably attack portability by constructing extreme examples, but the system does not need to work that way. Suppose a homeowner owes $300,000 at 3% and purchases a substantially more expensive house requiring $500,000 of total financing. The borrower could port the existing $300,000 balance under the existing qualifying terms while financing the additional $200,000 at the prevailing market rate. The lender would re-underwrite the borrower, verify income, assess the replacement property and ensure appropriate loan to value requirements.
The borrower does not receive an unlimited subsidized mortgage. They simply preserve qualifying financing on debt they already owe while paying market rates for new borrowing. British mortgage products already employ variations of this structure. Nationwide explains that borrowers requiring additional financing beyond the amount being ported may need a separate mortgage product for that additional borrowing. America could build its own version around the strengths and unique structure of the U.S. mortgage market.
Portability Could Make Downsizing Rational Again
The housing debate frequently focuses on young buyers, but America’s aging population creates another major problem. Millions of older homeowners occupy properties larger than they currently need, and some would prefer smaller houses, condos or homes closer to children and grandchildren.
Yet downsizing can produce a bizarre financial outcome. A homeowner may sell a large house carrying an extremely low-rate mortgage only to discover that financing a much smaller replacement property at current rates barely improves the monthly budget. Staying put can therefore become the rational financial decision even when the house no longer matches the homeowner’s needs.
That removes larger family homes from the market and prevents housing stock from migrating toward the households that need it most. NBER research has found that mortgage lock-in disproportionately reduces moves down the housing ladder. Portable mortgages could restore some of that movement, allowing older homeowners to downsize while freeing larger properties for growing families and opening additional homes further down the housing chain.
Trump Has a Rare Opportunity for a Pro-Growth Housing Reform
Trump has repeatedly framed his economic agenda around growth, deregulation and reducing financial pressure on American households. Portable mortgages fit naturally within that framework because they do not require rent controls, a massive new federal housing bureaucracy or trillions of dollars in deficit-financed stimulus. The reform instead removes a structural barrier preventing Americans from completing transactions they already want to make.
The administration should push FHFA and the government sponsored enterprises to determine how quickly portable mortgage products can be standardized within existing legal authority while supporting congressional legislation wherever additional authorization is required. Congress should simultaneously examine due-on-sale rules, MBS treatment, underwriting standards, tax consequences, servicing requirements and consumer protections necessary to make portability scalable. The goal should not be a tiny pilot program available to a handful of borrowers. The goal should be to modernize the American mortgage.
America Doesn’t Need to Reinvent the Mortgage. It Needs to Modernize It.
The United States operates one of the largest and most sophisticated financial systems in human history. Wall Street can price derivatives involving thousands of securities, currencies, interest-rate scenarios and risk assumptions in milliseconds. It strains credibility to argue that the same financial system cannot figure out how to allow a qualified family to move an existing mortgage balance from one approved house to another.
Britain can do it. Canada can do it. Major lenders in both countries explain portability to consumers as an ordinary mortgage feature. America’s current housing system instead tells homeowners who secured historically low mortgage rates that the price of moving may be surrendering tens or even hundreds of thousands of dollars in future financing value. That is not an efficient housing market. It is a mobility penalty.
NBER researchers have documented the consequences: reduced household movement, foregone transactions, distorted housing supply and demand, and billions of dollars in economic losses. More recent research indicates mortgage lock-in may even be keeping home prices and rents higher than they otherwise would be.
Portable mortgages will not solve every American housing problem. The country still needs more homes, faster permitting, smarter zoning, infrastructure investment and policies capable of expanding supply where people actually want to live. But portability attacks one of the strangest self-inflicted problems in the current economy: Americans who want to move, have equity and could otherwise afford to move are refusing to do so because the financial system destroys one of their most valuable assets, their existing mortgage terms, when they sell.
Washington does not need to spend another trillion dollars to fix that problem. It needs to stop making the mortgage disappear when the moving truck arrives.
Sources
National Bureau of Economic Research — Household Mobility and Mortgage Rate Lock
NBER — Quantifying Mortgage Rate Lock for U.S. Homeowners
NBER — Unlocking Mortgage Lock-In: Equilibrium Effects in a Spatial Housing Ladder Model
Rep. Tom Kean Jr. — Making Ownership Viable for Everyone (MOVE) Act
Nationwide — Porting Your Mortgage
Lloyds Bank — Porting Your Mortgage Rate
RBC Royal Bank — Mortgage Options When Moving Homes
RBC Royal Bank — Mortgage Portability Information
Cornell Legal Information Institute — Federal Due-on-Sale Law
