Jan. 9 at 8:15 PM
President Donald Trump announced plans to direct
$200 billion in mortgage bond purchases to push mortgage rates lower and improve housing affordability. The Federal Housing Finance Agency confirmed the move would be the largest MBS purchase ever by Fannie Mae and Freddie Mac, with buying already underway.
Analysts say faster execution could lower 30-year mortgage rates to around 5%, about 25 basis points below prior expectations. Markets reacted positively, with mortgage-backed securities rising and mortgage rates falling to 5.99%, the lowest level since 2023. Increased purchases are expected to narrow spreads between MBS and Treasuries, supporting lower borrowing costs.
Officials said the program would not hinder a potential future sale of the government’s stake in Fannie and Freddie and could boost their earnings. Trump also signaled additional housing policy measures may follow, including actions targeting institutional homebuyers and pressure on the Fed to cut rates
$FNMA $VMBS $MBB