When Donald Trump took to Truth Social urging “my Representatives” to buy $200 billion in mortgage bonds to make homeownership “more affordable,” the housing market immediately took notice. But whether the president’s call will meaningfully lower mortgage rates—or simply revive old risks—remains uncertain.
Trump’s “representatives” are none other than Fannie Mae and Freddie Mac, the government-sponsored enterprises that have long been at the heart of U.S. mortgage finance. As noted by The Wall Street Journal, Federal Housing Director Bill Pulte had already allowed the two GSEs to expand their purchases of mortgage-backed securities or MBS. Those same portfolios once played an outsized role in the subprime mortgage crisis, when heavy losses led to both agencies being placed under federal conservatorship.
Each agency is currently permitted to hold $225 billion in MBS assets. Together, Fannie and Freddie now hold roughly $247 billion, leaving around $200 billion in capacity for new purchases—the figure Trump wants leveraged. Boosting that volume could inject fresh liquidity into the mortgage market by allowing lenders to sell more loans and issue new ones. Yet analysts warn such a move carries echoes of the pre-2008 buildup that preceded major financial stress.
Markets reacted quickly. According to The New York Times, the gap between mortgage bonds and Treasurys narrowed by 10 basis points immediately after Trump’s post, signaling investor anticipation of lower yields. Still, skepticism persists over whether the scale of the move could meaningfully shift affordability.
“It’s $200 billion, not $5 trillion,” Jeff Lichtenstein, CEO of Echo Fine Properties, told GlobeSt.com.
Mortgage data from Bankrate.com put the national average rate at 6.19%, with top offers at 5.52%. Lichtenstein warned that rates alone may not restore affordability: “Affordability is eating away at the 28–36% guideline for expenditures. We’re all paying more for healthcare, food, clothing, and labor.
As people have less money to spend and credit limits tighten, 5% might be needed instead of 6%.”
There are, however, early signs of movement in some local markets. “November sales activity and pendings were up 20% year over year in Palm Beach County,” Lichtenstein said, adding that a mix of more inventory and “must-sell” listings paired with lower rates has helped spur demand.
Meanwhile, the Federal Reserve remains on a different path. As GlobeSt.com previously reported, the Fed now plans to resume buying short-term Treasurys—not to stimulate growth, but to support market stability and liquidity. That approach may steady the financial system, but it offers little direct help to the mortgage sector.
Data from the St. Louis Fed shows he central bank’s holdings of mortgage-backed securities have declined by more than 25% since peaking at $2.74 trillion in April 2022, falling to $2.04 trillion, as of January 7, 2026. The Fed trimmed nearly $200 billion from those holdings over the past year alone, through both maturities and limited sales. For now, it shows no sign of reversing that trend.
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