In late 2016, the Federal Housing Administration announced that its flagship fund had grown for the fourth year running. This represented reduced risks on their part when it came to providing mortgages for prospective homeowners. Appropriately, the Department of Housing and Urban Development (HUD) announced earlier this month that FHA annual mortgage premiums would be reduced – a move that could save homeowners hundreds of dollars in the year ahead.

Within an hour of taking Office, Trump's administration suspended this insurance cut.

Trump and Carson's change has been attacked by critics

This repeal should come as no surprise. #Donald trump's choice for the lead of HUD, Ben Carson, didn't seem enthusiastic about it. He announced a few hours before the Inauguration that the cut would be suspended.

Republicans had been sharply critical of the reduction, predicting that taxpayers would be hurt in the long run if another bank bailout would occur in future as a result.

Many people have taken this to be the first step in what is perceived to be Trump's incoming war on the working class. It's true that it will make it slightly harder for those in poor financial situations to get loans to buy homes – but here's a question worth asking: should the government be allowing those with bad credit to take out loans that could put them in even worse financial situations?

Trump's team were not briefed about the premium cuts

But suspensions of recent regulation changes are par for the course of any newly-inaugurated President. The Administration will want time to evaluate the policies that the previous Administration have attempted to force them to enact – and it's worth noting that the Obama Administration announced the premium cuts just days before Trump took office, and did so without briefing Trump's team.

The premium cut was something the Obama Administration did on its way out the door, possibly in an attempt to force the next Administration's hand. Critics also suggested it represented little change: it would save an average of $500 a year for borrowers – good, but not an amount worth singing about.

Could Trump's action help the economy?

There are two sides to this coin. Home ownership does introduce stability that can help people grow their wealth. But people borrowing money that they can't afford to pay back is harmful to the economy at large. In terms of mortgages, it's what eventually results in repossessions and foreclosures.

Something to remember is that the premium cut was a pending change that has now been suspended. This wasn't a privilege that people were already using that Trump has now taken away. It's unlikely to affect any upward trend in the housing market, so immediate harm to the economy is highly unlikely.

How will Trump help the working class into home ownership?

FHA premiums have been the subject of a lot of change and speculation over the last two years – and it's worth noting that Obama's administration made their fair share of changes that hurt prospective homeowners, as recently as last February with their life-of-the-loan policy.

Still, there's no denying that this change makes it slightly more difficult for people with bad credit to get on the housing ladder. Big loans despite bad credit, however, was a big cause of the 2008 financial crash – so there is that to remember.

It's difficult to say just yet how good or bad this change will be.

The housing market has seen a boom this past year, and it certainly would be nice to see the working class benefit from this. Perhaps these proposed premium cuts could have helped. But maybe there's another way: increasing wealth so more people can buy homes without premium cuts. Will Trump be able to achieve this?

In any case, it's worth remembering that a suspension could merely be a delay – not a reversal.

Regardless, it seems that mortgage interest rates – not the premiums – are the housing costs to worry about. They've been steadily rising – which means more monthly expense for homeowners.
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