Trump Proposes $200 Billion Mortgage Bond Purchases to Push Down Home Loan Rates

President Donald Trump said the U.S. government will move to purchase $200 billion in mortgage bonds, a step he claims would reduce mortgage rates and monthly payments as voters grapple with high home prices ahead of November’s midterm elections.

Trump said the funds would come from cash reserves at Fannie Mae and Freddie Mac, which have been under government conservatorship since the 2008 financial crisis. “This will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable,” Trump wrote on social media. The White House has not provided a timeline or operational details for the purchases.

The proposal echoes past interventions by the Federal Reserve, which bought mortgage-backed securities during periods of economic stress to compress borrowing costs—helping many homeowners refinance at rates near 3%. Today, average 30-year fixed mortgage rates hover around 6.2%, according to Freddie Mac, and have not dipped below 6% since September 2022.

Economists caution the impact may be modest. Daryl Fairweather, chief economist at Redfin, estimates such purchases could trim 0.25 to 0.5 percentage points from 30-year mortgage rates. But she notes the move would not resolve a chronic housing supply shortage, the main driver of affordability challenges. Lower rates could even spur marginal demand without unlocking enough inventory, limiting benefits.

There are also trade-offs. Using Fannie and Freddie’s cash buffers could reduce their resilience in a downturn, increasing risk if housing conditions weaken. Meanwhile, the Fed still holds about $2 trillion in mortgage-backed securities—down from $2.7 trillion in mid-2022—as it has been unwinding pandemic-era support.

Housing costs remain a political flashpoint. Mortgage rates surged as inflation peaked in 2022, and although rates are down from near 7% early in Trump’s second term, many households remain squeezed by housing, food, and energy prices. About $21.1 trillion in U.S. mortgage debt was outstanding as of mid-2025, and many owners remain “rate-locked” into sub-3% loans from the pandemic era, constraining supply.

Trump has signaled additional housing actions, including plans to block institutional investors from buying homes. Analysts say that without measures to boost construction and listings, bond purchases alone may provide short-term relief but fall short of fixing the structural imbalance at the heart of the housing market.