After Trump Posts Bonds Plan, Mortgage Rates Pass Threshold

Mortgage rates just booked their sharpest one-day slide in months, triggered by a social media post from the president. The average 30-year fixed mortgage rate dipped to 5.99% on Friday, slipping below 6% for the first time since February 2023, according to Mortgage News Daily. That's down from 6.21% a day earlier and more than a full percentage point lower than a year ago. Rates on 15-year fixed loans also moved lower, to 5.55%. Such sizable daily moves are unusual in a market where changes are typically measured in hundredths of a point, NBC News reports.

The drop followed President Trump's announcement on Truth Social that he had ordered his "representatives" to purchase $200 billion in mortgage bonds, saying the move would push down borrowing costs and monthly payments. Federal Housing Finance Authority chief Bill Pulte later said that Fannie Mae and Freddie Mac—the government-backed mortgage giants—would carry out the buying. Both already hold more than $230 billion in mortgage securities combined, so an additional $200 billion would nearly double their portfolios. By buying mortgage bonds from lenders, Fannie and Freddie free up cash that can be used to issue new loans, which tends to ease rates if demand for mortgages doesn't spike at the same time.

Trump on Wednesday had said he wants the government to block big investors from buying single-family homes to use as rentals. Some industry analysts said that practice drives up housing prices, including rents, per the New York Times. Analysts at UBS said the bond-buying plan could nudge 30-year rates down by more than 0.2 percentage points and potentially boost homebuilding and existing-home sales. Others are skeptical, per NBC. JPMorgan Chase analysts said they don't expect either Trump plan to have much impact. The bonds program, they said, is too small to meaningfully reshape the housing market, noting that $200 billion is only about 1.4% of the roughly $14.5 trillion mortgage market in the US and that current homeowners still enjoy an average rate of 4.4%. That provides little incentive to move even if rates for new buyers inch down.