Mortgage rates hit lowest level in three years after Trump mortgage-bond plan

Mortgage rates fell to about 5.99% after President Trump said he had directed Fannie Mae and Freddie Mac to buy $200 billion of mortgage bonds, and market data showed an immediate reaction.

Mortgage rates fell after President Donald Trump announced a plan directing Fannie Mae and Freddie Mac to buy $200 billion of mortgage bonds. He posted the announcement on Truth Social and markets reacted quickly. Mortgage News Daily reported the average 30-year fixed mortgage rate dropped 22 basis points to about 5.99 percent, the lowest since February 2023. The announcement has renewed discussion about refinancings, buyer demand and possible effects on home prices. Key facts: - The president announced on social media that he had ordered government-backed firms Fannie Mae and Freddie Mac to buy $200 billion in mortgage-backed securities. - Mortgage News Daily reported the 30-year fixed rate fell about 22 basis points to roughly 5.99%, matching the lowest level since February 2023. - Analysts quoted in industry coverage said the scale of the proposed purchases appeared meaningful and could lower rates by roughly 0.25–0.5 percentage points. - Lower mortgage rates can encourage more buyers to enter the market, which can put upward pressure on home prices when supply remains limited. - Observers noted risks from drawing down Fannie Mae and Freddie Mac reserves and that many existing homeowners already hold mortgage rates below 4%, limiting some refinancing upside. Summary: The announcement produced an immediate drop in reported mortgage rates and prompted higher refinancing activity and gains for some homebuilder stocks. Analysts say the $200 billion bond purchases could reduce mortgage rates further by a modest amount, while also raising concerns about reserve levels at government-backed firms and not addressing the underlying shortage of homes for sale. Undetermined at this time.