President Trump has directed the federal government to buy $200 billion in mortgage bonds, a move he says will drive down monthly mortgage costs and put more cash in homeowners’ pockets.
The president said Thursday that he was ordering Fannie Mae and Freddie Mac, two government-sponsored mortgage-issuing entities, to purchase the mortgage bonds, adding that they have the cash to do it.
“This will drive mortgage rates down, monthly payments down and make the cost of owning a home more affordable. It is one of my many steps in restoring affordability, something that the Biden administration absolutely destroyed. We are bringing back the American dream that was destroyed in the last administration,” Mr. Trump wrote on Truth Social.
The Federal Housing Finance Agency oversees Fannie Mae and Freddie Mac. FHFA Director Bill Pulte posted on X late Thursday, “We are on it. Thanks to President Trump, Fannie and Freddie will be executing.”
Mr. Trump has been increasingly focused on the “affordability issue” ahead of the midterm elections in November. Earlier this week, Mr. Trump announced that he would ban institutional investors from purchasing single-family homes.
Home prices have continued to rise faster than incomes because of a shortage of housing supply, in part due to a shortfall of construction materials. It has made it harder for renters to buy their first homes or existing homeowners to upgrade to a new property.
The Federal Reserve in the past has purchased mortgage bonds in an effort to lower rates as part of the monetary policy known as “quantitative easing.” But the executive branch cannot order the independent central bank to carry out those transactions.
Typically, the Fed makes the purchase during economic turmoil to help reduce interest rates and allow many homeowners to refinance to lower rates. However, lower rates have also made homeowners reluctant to sell their properties, keeping the market short on inventory.
The 30-year mortgage rate averaged 6.16% in the week ending Jan. 8, Freddie Mac announced Thursday. That’s the lowest level since October 2024.
