Overview
- Trump announced a plan to fund the purchases using cash held by Fannie Mae and Freddie Mac, arguing the move will lower mortgage rates and monthly payments.
- FHFA Director Bill Pulte said the two government-sponsored enterprises will execute the directive; the firms remain in conservatorship and have room to expand their retained portfolios by roughly this scale.
- Economists estimate the program could trim average 30-year mortgage rates by about 0.25 to 0.5 percentage points, but they caution it would not resolve supply-driven affordability pressures.
- Analysts warn the effort could reignite home-price inflation and reduce Fannie and Freddie’s cash buffers intended as safeguards in a downturn.
- Markets reacted positively as mortgage-backed securities outperformed Treasuries and mortgage-linked stocks such as Rocket and LoanDepot rose; the move follows a separate proposal to bar institutional buyers from single-family homes.