H.R. 1846, the Federal Reserve Board Abolition Act: What Ending the Federal Reserve Could Mean for the Housing Market

In March 2025, Representative Thomas Massie (R-KY) introduced H.R. 1846, the Federal Reserve Board Abolition Act, a bill that aims to eliminate the Federal Reserve System by abolishing its Board of Governors and the 12 regional Federal Reserve banks. In the Senate, Senator Mike Lee (R-UT) introduced a companion bill, S. 869.

This legislation would repeal the Federal Reserve Act of 1913, effectively dismantling the U.S. central banking system. Supporters of the bill, including several conservative lawmakers, argue that the Federal Reserve has contributed to inflation and allowed excessive government spending through its monetization of debt. They claim that removing the Fed would return monetary policy to market forces, preventing what they see as government interference in the economy.

However, the abolition of the Federal Reserve would have massive consequences for the housing market, introducing significant uncertainty and instability. The Federal Reserve plays a crucial role in setting interest rates, controlling inflation, and stabilizing the financial system—all of which directly impact home affordability, mortgage rates, and overall economic health.

How Would Ending the Federal Reserve Affect the Housing Market?

The Federal Reserve has been responsible for setting the federal funds rate, which influences mortgage rates and the cost of borrowing. Without it, there would be no centralized control over interest rates, leading to wild fluctuations. Mortgage lenders would set rates based on market conditions and risk factors, which could result in higher and more unpredictable mortgage rates, making homeownership more expensive for many Americans.

Additionally, the Federal Reserve acts as a stabilizing force during economic downturns. It has provided liquidity to the banking system, ensuring that mortgages remain available even in times of crisis. Without it, there would be no federal backstop to support lending, meaning that financial crises—such as the 2008 housing crash—could last longer and have deeper effects on homeowners and the economy.

Lending standards could also tighten dramatically. Currently, the Federal Reserve's policies encourage banks to lend by providing access to liquidity and setting reserve requirements. If the Fed were abolished, banks would likely become more conservative with lending, requiring larger down payments and stricter credit scores, making it harder for first-time buyers and lower-income households to enter the housing market.

The long-term impact on inflation and home prices is uncertain. Without the Federal Reserve, the U.S. government would lose one of its primary tools for controlling inflation. Some argue that eliminating the Fed would prevent excessive money printing, which could reduce inflation.

However, the lack of central oversight could also create market instability, driving inflation higher in unpredictable ways.

Housing prices could also become more volatile without the Fed’s influence. One of the Federal Reserve's roles is to help stabilize economic cycles by adjusting interest rates to manage demand in the housing market. Without this balancing force, home prices could see larger booms and busts, increasing risk for homeowners and investors.

Furthermore, the absence of the Federal Reserve would mean the government would no longer have the ability to step in during times of financial crisis. In past economic downturns, the Fed has lowered interest rates and purchased mortgage-backed securities to support the housing market. Without these interventions, the next recession could result in a wave of foreclosures, declining home values, and prolonged market uncertainty.

The private banking sector would also gain greater control over monetary policy. With no central bank oversight, large financial institutions would have more power in determining interest rates and credit availability. This could lead to an increase in financial inequality, as wealthier borrowers gain access to lower mortgage rates, while middle- and lower-income buyers face higher borrowing costs and more restrictive lending policies.

What Comes Next?

While H.R. 1846 is unlikely to pass, its reintroduction signals renewed debate over the role of the Federal Reserve in shaping the U.S. economy. For now, the Federal Reserve remains intact, meaning interest rates, mortgage availability, and financial regulations will continue to operate as they have in recent years. However, homeowners and potential buyers should stay informed on how these discussions evolve, as any significant changes to the Fed’s authority could have major implications for the housing market and overall economic stability.