Mortgage rates on Friday fell below 6% for the first time in years, after President Donald Trump ordered his \u201crepresentatives\u201d to begin buying $200 billion worth of mortgage bonds, his latest push to lower costs for Americans grappling with the high cost of living.<\/p>\n
The average interest rate for a 30-year fixed residential mortgage hit 5.99% on Friday morning, down from 6.21% on Thursday, according to data provider Mortgage News Daily<\/a>. That\u2019s the lowest the 30-year average rate has been since February 2023.<\/p>\n As of Friday, rates for the average 30-year mortgage have now fallen more than 1% in the past year.<\/p>\n Interest rates for a 15-year fixed rate mortgage also dropped significantly on Friday, falling to 5.55%.<\/p>\n Mortgage rates typically rise and fall very slowly, by just tenths or even hundredths of a percent per day. So the latest moves are well out of the ordinary.<\/p>\n The sharp drops came after Trump wrote on Truth Social Thursday that he was \u201cinstructing my Representatives to BUY $200 BILLION DOLLARS IN MORTGAGE BONDS.\u201d<\/p>\n \u201cThis will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable,\u201d Trump said in the post.<\/p>\n Federal Housing Finance Authority chief Bill Pulte later said in his own social media post<\/a> that \u201cFannie [Mae] and Freddie [Mac] are the entities that will do the purchases.\u201d<\/p>\n Indeed, Trump\u2019s announcement alone brought rates down immediately. Pulte told reporters at the White House on Friday that he had already begun to execute on Trump’s instructions. “We put in a $3 billion buy already,” he said.<\/p>\n In recent months, Fannie Mae and Freddie Mac have bought tens of billions of dollars\u2019 worth of mortgage bonds. As of their most recent public filings, the two entities have combined holdings of mortgage securities worth more than $230 billion.<\/p>\n If Fannie and Freddie were to buy another $200 billion in bonds, it would nearly double their holdings.<\/p>\n Rates move down because Fannie and Freddie buy the bonds from lenders, which then have more money to lend to homebuyers. With an increase in the supply of money to lend and demand relatively steady, interest rates, the price of mortgages, tend to fall.<\/p>\n Trump\u2019s announcement was the latest push by his administration to combat an affordability crisis gripping consumers at the start of an election year.<\/p>\n The administration has also rolled back some tariffs <\/a>and fuel efficiency standards<\/a> for passenger vehicles, moves aimed at lowering everyday costs for Americans.<\/p>\n Analysts at UBS on Friday wrote in a client note that they believe Trump\u2019s bond buying plan could help push 30-year fixed mortgage rates down more than a fifth of a percent.<\/p>\n \u201cThis decline may provide a boost to both new construction demand and existing home turnover,\u201d the UBS analysts wrote.<\/p>\n But Trump\u2019s bond buying plan may not be a silver bullet.<\/p>\n The average interest rate of U.S. residential mortgages currently outstanding is a steady 4.4% \u2014 well below the average rate for a new mortgage.<\/p>\n This means the impact of Trump\u2019s plan on homeowners who are reluctant to sell their homes because they have low mortgage rates could be limited.<\/p>\n \u201cSimilar to our view on President Trump\u2019s post regarding a ban on institutional investors buying homes, we do not believe this initiative will have any significant impact on the housing market,\u201d JPMorgan Chase homebuilding analysts said on Friday.<\/p>\n \u201c$200 billion of mortgages accounts for only roughly 1.4% of the approximately $14.5 trillion mortgage market,\u201d they wrote.<\/p>\n","protected":false},"excerpt":{"rendered":" Mortgage rates on Friday fell below 6% for the first time in years, after President Donald Trump ordered his \u201crepresentatives\u201d to begin buying $200 billion worth of mortgage bonds, his latest push to lower costs for Americans grappling with the high cost of living. The average interest rate for a 30-year fixed residential mortgage hit <\/p>\n","protected":false},"author":0,"featured_media":4916,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[],"class_list":{"0":"post-4915","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"_links":{"self":[{"href":"https:\/\/marketsfortress.com\/index.php\/wp-json\/wp\/v2\/posts\/4915","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/marketsfortress.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/marketsfortress.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/marketsfortress.com\/index.php\/wp-json\/wp\/v2\/comments?post=4915"}],"version-history":[{"count":0,"href":"https:\/\/marketsfortress.com\/index.php\/wp-json\/wp\/v2\/posts\/4915\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/marketsfortress.com\/index.php\/wp-json\/wp\/v2\/media\/4916"}],"wp:attachment":[{"href":"https:\/\/marketsfortress.com\/index.php\/wp-json\/wp\/v2\/media?parent=4915"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/marketsfortress.com\/index.php\/wp-json\/wp\/v2\/categories?post=4915"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/marketsfortress.com\/index.php\/wp-json\/wp\/v2\/tags?post=4915"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}