Erika Barris

She sounds like the ring announcer at a boxing match.

Let's get ready to explain mortgage-backed securities.

I can't follow that, so I think you should keep going.

And we wanted to know, how is Trump's plan going to help people like Gilmore Girls' loving potential homebuyer James in Djibouti?

And Susan was like, well, in case you can't quite recall what mortgage-backed securities are, here's how it goes.

Those pools of mortgages are the mortgage-backed securities.

And if more investors want to buy those mortgage-backed securities, the interest rate on mortgages goes down.

Which means when the Trump administration directs its quasi-governmental mortgage companies, Fannie and Freddie, to buy up a bunch of mortgage-backed securities... Effectively, this is going to what?

Yeah, this one is already working.

In fact, even just announcing this, Susan says, pushed rates down 0.2 percentage points.

The markets adjusted immediately.

She calls this the announcement effect.

Apparently, investors heard the Trump administration's plans and acted accordingly.

The problem, she says, is that there are just a lot of other things that affect mortgage rates, like geopolitical events.

Susan says she's into the Trump administration plan, in theory.

Pushing rates down is a good thing, but... There is a downside.

Yeah, sounds like we've been here before.

Deja vu.

But the other thing we should discuss here is that these two policies, the only two the Trump administration has rolled out so far, both of them ignore the one thing most housing economists have been shouting from the rooftops, the root cause of the affordability crisis.

She says the best thing would be to keep prices relatively steady and build a lot of starter homes.