President Trump Directs $200 Billion Mortgage Bond Purchase to Lower Rates
President Donald Trump has instructed the federal government to purchase $200 billion in mortgage bonds, aiming to reduce mortgage rates and enhance housing affordability.
President Donald Trump announced on Thursday that he has directed the federal government to purchase $200 billion in mortgage bonds, a move intended to lower mortgage rates and improve housing affordability.
In a post on Truth Social, Trump stated that Fannie Mae and Freddie Mac, the two government-sponsored mortgage entities, have accumulated significant cash reserves. He indicated that these funds would be utilized for the bond purchases.
"This will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable," Trump wrote.
The specifics of the directive, including the timeline and the exact mechanisms for the bond purchases, were not immediately clarified. The White House and the Federal Housing Finance Agency did not respond to requests for further details.
Economists have expressed skepticism about the potential impact of this initiative. Daryl Fairweather, chief economist at Redfin, estimated that such purchases might reduce mortgage rates by 0.25 to 0.5 percentage points. However, she cautioned that this reduction may not significantly alleviate the broader affordability challenges in the housing market.
Mortgage rates have been averaging around 6.2%, a decrease from nearly 7% a year prior but still considerably higher than the sub-3% rates seen during the pandemic.
This announcement follows Trump's recent proposal to ban large institutional investors from purchasing single-family homes, as part of a broader strategy to address housing affordability concerns.
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