President Trump Directs $200 Billion Mortgage Bond Purchase to Lower Rates

President Donald Trump announced on Thursday that he has directed the federal government to purchase $200 billion in mortgage bonds, utilizing funds from Fannie Mae and Freddie Mac, both under government conservatorship. The initiative aims to lower mortgage rates and address concerns over housing affordability.

"This will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable," Trump stated on social media.

Federal Housing Finance Agency Director Bill Pulte confirmed the directive, indicating that the purchases would be executed promptly.

Economists have offered mixed reactions. Daryl Fairweather, chief economist at Redfin, estimated that the bond purchases could reduce 30-year fixed mortgage rates by 0.25 to 0.5 percentage points. However, she cautioned that this measure might not significantly alleviate the broader affordability crisis, which is also influenced by a chronic shortage of housing supply.

Mortgage rates have been averaging around 6.2%, according to Freddie Mac, which, along with Fannie Mae, has been under federal conservatorship since the 2008 financial crisis.

The administration's move comes ahead of the November midterm elections, reflecting efforts to address voter concerns about housing costs.