Mortgage rates hit 3-year low as Trump instructs Fannie Mae and Freddie Mac to buy mortgage bonds

Summary

Diana Olick discusses mortgage rates falling to a three-year low after President Trump instructed Fannie Mae and Freddie Mac to buy $200 billion in mortgage-backed bonds. Analysts expect the MBS purchases could lower mortgage rates by 25-50 basis points, potentially boosting new construction demand and existing home turnover. However, housing analysts caution that lower rates alone may not revive the market because qualification and down-payment hurdles remain, and the housing market still needs more supply and price relief.

• 30-year fixed mortgage rate fell 22 basis points to 5.99%.
• Trump directed Fannie Mae and Freddie Mac to buy $200B in mortgage-backed bonds.
• MBS purchases can lower mortgage rates; analysts see a 25-50 basis point drop.
• Lower rates could help affordability and monthly payments.
• UBS sees a potential boost to new construction demand and existing home turnover.
• Builders have already been buying down mortgage rates into the 5% range.
• Ivy Zelman says the rate drop is not enough; qualification and down-payment issues persist.
• The housing market still needs more supply and price easing.