Mortgage rates plunged Friday to their lowest levels in nearly three years after President Donald Trump took decisive action to jump-start housing affordability—something Washington talked about for years but somehow never managed to deliver before. Funny how that works.
Following Trump’s directive for mortgage giants Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities, markets reacted fast. Very fast. The move injected liquidity directly into the housing finance system, and rate expectations immediately shifted downward.
Trump didn’t mince words. He announced that mortgage rates had dropped to around 5.7%, noting that under Biden they hovered near 8%, effectively locking young families out of homeownership. His message was clear: focus on affordability, use the tools available, and put Americans first. The market listened.
Mortgage News Daily showed the national average for a 30-year fixed mortgage at 6.06% on January 9, down from 6.21% just a day earlier. Other coverage cited an even sharper intraday move, briefly pushing rates below 6% to 5.99%—a psychologically important threshold for buyers and refinancers who have been sitting on the sidelines.
For context, Fannie Mae and Freddie Mac don’t issue loans themselves. They buy mortgages from lenders and package them into securities, keeping capital flowing through the system. Trump’s directive simply put that machinery to work—aggressively and unapologetically.
And yes, government intervention in the mortgage-backed securities market has plenty of precedent. During the early months of the COVID crisis, the Federal Reserve bought $580 billion in agency MBS in just two months and expanded its holdings from $1.4 trillion to $2.3 trillion. Back then, it was called “necessary.” Now that it’s lowering costs for families, suddenly it’s “controversial.”
The move has also reignited debate over whether Fannie and Freddie will ever be privatized. Analysts note that Trump previously praised his decision not to IPO the firms during his first term, suggesting he views them as tools to advance real-world policy outcomes—not Wall Street experiments. As one analyst bluntly put it, if these entities can help implement presidential policy, don’t expect them to be re-privatized anytime soon.
Lower rates, however, don’t magically fix everything. Home prices remain high, with the National Association of Realtors reporting a median existing-home price of $409,200 in November 2025. Inventory is still tight. But cheaper borrowing costs are real relief—and relief matters.
Refinancing demand was already surging before Trump’s announcement. The Mortgage Bankers Association reported its Refinance Index was 133% higher than the same week a year earlier. Americans were clearly ready to move the moment rates gave them a reason.
Meanwhile, household wealth hit a record $181.6 trillion in September 2025, fueled by rising home values and stock market gains from the AI boom. In other words, the foundation is there—what’s been missing is leadership willing to act.
Now, with mortgage rates falling and affordability back at the center of policy, families are finally catching a break. It turns out when Washington stops lecturing and starts doing, the numbers—and the people—respond.
