Trump Suggests Purchase of $200 Billion in Mortgage Bonds, What It Means for Mortgage Rates

Trump's Plan to Buy Mortgage Bonds

President Trump has suggested that his representatives will buy $200 billion in mortgage bonds. This move is aimed at lowering mortgage rates, which have been above 6% for some time.

What Does This Mean for Mortgage Rates?

The purchase of mortgage bonds by the government can help to reduce the interest rates on these bonds. This, in turn, can lead to lower mortgage rates for homebuyers. However, the impact of this move on mortgage rates is not yet clear.

Freddie and Fannie's Mortgage Bond Holdings

Freddie and Fannie, the two government-sponsored enterprises that buy and securitize mortgages, have been growing their mortgage bond holdings in recent months. However, the 30-year fixed mortgage rate is still above 6%.

Market Reaction

The market reaction to Trump's announcement has been mixed. Some analysts believe that the purchase of mortgage bonds could help to stimulate the housing market, while others are skeptical about the effectiveness of this move.

Conclusion

The purchase of $200 billion in mortgage bonds by the government is a significant move that could have a major impact on the housing market. However, the outcome of this move is not yet clear, and it will depend on a variety of factors, including the interest rates on the bonds and the overall state of the economy.

Sources

[5] Trump wants purchase of $200 billion in mortgage bonds. What that means for mortgage rates.