Trump slashes US mortgage rates below 6% with $200B bond intervention
Mortgage rates in the US have dropped sharply after the Trump administration took direct action to ease borrowing costs. The move comes as part of a broader effort to improve housing affordability and stabilise the stock market today.
President Donald Trump has used funds from Fannie Mae and Freddie Mac to purchase mortgage bonds, injecting around $200 billion into the mortgage market today. The Federal Housing Finance Agency (FHFA) confirmed the intervention is already lowering rates for homebuyers.
The administration's strategy centres on two key goals: cutting mortgage costs and increasing housing supply. Rates, which recently neared 8%, have now fallen to below 6%, a shift officials describe as rapid and impactful.
Instead of selling Fannie Mae and Freddie Mac for an estimated $100 billion, the White House redirected their cash reserves to support the bond market. This approach was designed to relieve pressure on borrowers while maintaining liquidity. FHFA Director William J. Pulte credited Trump's inflation fight and market intervention for the quick turnaround, calling the rate reduction a direct result of these measures.
Beyond rate cuts, the government is also tackling institutional ownership of homes. New policies aim to curb large-scale investors buying up properties, ensuring more homes remain available to individual buyers. At the same time, coordination with homebuilders seeks to boost construction and expand supply.
Looking ahead, officials have not ruled out a public offering for Fannie and Freddie. While an IPO is described as 'more likely than not,' all options remain under review as the administration weighs long-term solutions for the mortgage market today.
The $200 billion bond purchase has already pushed mortgage rates lower, making home loans more accessible. With further steps to limit corporate ownership and increase housing stock, the administration aims to sustain affordability in the coming months. The impact of these measures will depend on continued stock market stability today and builder participation.
