Trump’s Bold Mortgage Rate Slash Strategy: What Homebuyers Need to Know in 2026

Mortgage rates are about to get a presidential makeover.

The Rate-Cutting Blueprint

Forget waiting on the Fed's next move. The proposed strategy bypasses traditional monetary policy levers entirely—targeting regulatory frameworks and secondary market structures that have kept borrowing costs artificially elevated. It's a direct assault on the housing affordability crisis.

Market Mechanics Rewired

The plan doesn't just tweak rates; it rewires the transmission mechanism between Treasury yields and your monthly payment. By altering how mortgage-backed securities trade and who bears the risk, the proposal could decouple home loans from bond market volatility that's plagued buyers for years.

The Homebuyer's Edge

Qualified borrowers might see approval times shrink alongside rates. The strategy includes streamlining verification processes that currently add weeks to closing timelines—potentially turning a 45-day closing into a 3-week sprint.

Banking's New Math

Lenders would face compressed margins but potentially higher volume. The trade-off: thinner profits per loan versus a tsunami of refinance applications as millions suddenly qualify for better terms. One analyst quipped, 'Wall Street will hate this until they figure out how to securitize the political risk premium.'

The Catch (There's Always One)

Lower rates could ignite already-hot housing markets, pushing prices further beyond reach for first-time buyers. And that cynical finance jab? 'Nothing makes bankers more nervous than politicians promising to save people money—it usually means their spreadsheets are about to get ugly.'

The proposal lands as housing inventory remains tight and generational wealth gaps widen. Whether it becomes policy or campaign rhetoric will determine if 2026 becomes the year homeownership stopped being a spectator sport.

Key Takeaways

• President Donald Trump said he would instruct mortgage firms Fannie Mae and Freddie Mac to buy up to $200 billion in mortgage bonds, which he said would bring down mortgage rates.
• It’s unclear how much impact the move would make on the market for mortgage bonds, which is currently valued at around $11 trillion.

President TRUMP has ordered Fannie Mae and Freddie Mac to buy $200 billion in mortgage bonds, a move aimed at lowering rates that have kept many would-be homeowners stuck on the sidelines.

“I am instructing my Representatives to BUY $200 BILLION DOLLARS IN MORTGAGE BONDS. This will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable,” Trump wrote on his Truth Social network.

Federal Housing Finance Agency Director William Pulte confirmed on social media that Fannie Mae and Freddie Mac will conduct the mortgage bond purchases.

Markets responded quickly. The 30-year mortgage rate dropped on Friday to NEAR 6%, its lowest level since early 2023, according to Mortgage News Daily.

Why This is Important to You

Lower mortgage rates directly affect whether you can afford to buy or refinance a home. Mortgage rates also affect housing prices, consumer spending and broader economic growth.

When you get a mortgage, your lender often sells it to Fannie Mae or Freddie Mac. They then bundle the loans into investments called mortgage-backed securities and sell them to investors. That cycle keeps cash flowing to lenders and, in theory, keeps mortgage rates in check. Shifting to having Fannie and Freddie buy these bonds instead is meant to lower mortgage rates.

Will $200 Billion Move the Needle?

The problem is that the mortgage-backed securities market totals around $11 trillion, according to LPL Financial. A $200 billion buy is significant, but unlikely to drive a major change in the mortgage market on its own.

Fannie and Freddie have already been heading this direction. The firms increased their MBS holdings by more than 25% since June, reaching almost $234 billion by October.

The purchases by Fannie and Freddie, as well as the increased buying Trump ordered, are meant to bring down mortgage rates, which have been stuck at above 6% for several years. Even as rates declined somewhat in recent months, they're still more than double the rates earlier this decade.

Related Education

“Fannie and Freddie have already loaded up their balances sheets with MBS,” wrote Mike Simonsen, chief economist at Compass, on the X social media platform. “Trump wants more of this. Seems like it'll help rates, gotta wonder how sustainable it is.”

Others are more skeptical. Joel Berner, senior economist at Realtor.com, called any impact "modest and short-lived," noting that the Federal Reserve's own MBS purchases totaled $2 trillion, 10 times the scale of Trump's directive. Even if rates fall, Berner warned, the relief may be fleeting: more buyers in the market could push home prices higher, erasing any gains from Trump's directive.

There's another wrinkle. The administration has also floated a separate proposal to end the government's control of Fannie and Freddie. While both are publicly traded on the over-the-counter market, the U.S. Treasury has held a majority stake in them since the 2008 financial crisis. Some analysts have warned that privatizing them could push mortgage rates higher, undercutting the goal of this week's directive. That's because the government's implicit backing keeps borrowing costs lower.

Trump's directive is his second significant MOVE on housing this week. On Wednesday, he announced a plan to ban large investors from buying single-family homes, another attempt to make housing more affordable in a market where tight inventory and high prices have kept many would-be buyers on the sidelines.