Overview
- FHFA Director Bill Pulte said Fannie Mae and Freddie Mac will carry out the purchases and that the action can be executed quickly.
- Housing experts expect the buying to compress mortgage spreads and trim rates by about a quarter percentage point, with some estimates as high as a half point.
- The plan could draw down the GSEs’ cash buffers and may put upward pressure on home prices given persistent supply shortages.
- Markets reacted to the announcement as agency MBS outperformed Treasuries, mortgage-linked stocks rose, and one tracker reported the 30-year rate near 6%.
- The directive taps portfolio capacity available under conservatorship, pairs with a proposal to bar large investors from buying single-family homes, and further details are expected when the president speaks in Davos later this month.