Jamie Dimon, the influential head of JPMorgan Chase, this week called for regulatory simplification and expansion of low-income tax credit programs to tackle the affordability issue in the U.S. housing market.
In his annual letter to shareholders released on Monday, Dimon said that “streamlining loan origination and servicing standards, reducing capital requirements and simplifying securitization rules would reduce the cost of mortgages without making them riskier.”
According to Dimon, “These simple reforms could lower the cost of mortgages by 70–80 basis points.”
To support his point, Dimon mentioned an estimate from the Urban Institute showing that by eliminating “unnecessary regulations,” mortgage originations could increase by 1 million per year, benefiting mainly individuals seeking to buy homes in the $150,000–$300,000 range. That would help people move out of rental properties, reducing rents for those still renting, he added.
Dimon’s comments on capital come as the Federal Reserve, under President Joe Biden’s administration, attempted to implement the Basel III Endgame rules, which were set to increase requirements for large banks, including a boost to their residential mortgage portfolios compared to international standards. The rule, under revision after a strong market reaction, is in doubt under the Trump administration.
“Profligate” fiscal policies
Dimon, who said the government has been “fiscally irresponsible and profligate,” also cited the need to increase funding for some government programs – for example, expanding the Low-Income Housing Tax Credit (LIHTC) programs, which he called “successful.” In addition, making the New Markets Tax Credit program permanent would incentivize investments that increase economic opportunity in disinvested communities, he said.
Dimon also focused on local zoning requirements, which – when good and consistent, meaning executed with a sense of urgency – “are essential in building more affordable housing.”
Regarding the Trump administration, the head of JPMorgan Chase, a bank that moves over $10 trillion in more than 160 countries daily, said that the “recent tariffs will likely increase inflation and are causing many to consider a greater probability of a recession.”
“As for the short-term, we are likely to see inflationary outcomes, not only on imported goods but on domestic prices, as input costs rise and demand increases on domestic products. How this plays out on different products will partially depend on their substitutability and price elasticity. Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth.”
Despite the recent decline in markets that succeeded the tariffs announcement, Dimon said that “prices remain relatively high.”
“These significant and somewhat unprecedented forces cause us to remain very cautious.”
JPMorgan Chase safeguards over $35 trillion in assets. The bank was the sixth-largest mortgage lender in the country in 2024, according to Inside Mortgage Finance estimates. The bank originated $47.4 billion, up 14.4% year over year.
