Trump Orders $200 Billion Purchase of Mortgage Bonds in Bid to Lower Housing Costs

President Donald Trump announced Thursday that he has ordered what he called “my representatives” to buy $200 billion in mortgage bonds in an effort to lower mortgage interest rates and make homeownership more affordable.

In a post on Truth Social, Trump said the directive would be funded through Fannie Mae and Freddie Mac, the government-backed mortgage giants, which he claimed now have sufficient cash on hand to support the move. Trump argued that purchasing mortgage-backed securities would help drive mortgage rates and monthly payments down.

Traditionally, the Federal Reserve has been the primary buyer of mortgage-backed securities, especially during periods of economic stress. During the COVID-19 pandemic, the Fed purchased hundreds of billions of dollars in mortgage bonds, contributing to historically low mortgage rates. While increased purchases of these securities can put downward pressure on mortgage rates, the Federal Reserve does not directly set those rates, and results can vary.

Mortgage rates have remained elevated in recent years despite multiple interest rate cuts by the Fed. Analysts point to tight housing supply as a major reason. Many homeowners who secured ultra-low mortgage rates during the pandemic have been reluctant to sell, limiting inventory. According to industry estimates, the United States faces a shortage of roughly 4 million homes needed to restore affordability.

Trump did not clarify who his “representatives” are, how quickly the bond purchases would occur, or whether he has the authority to authorize the move without congressional approval. Bill Pulte, director of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, responded publicly that his agency would take on the initiative.

The announcement also comes as Trump has continued to weigh taking Fannie Mae and Freddie Mac public, an idea he explored during his first term and has revisited in recent years.

While the proposal is aimed at easing housing costs, economists caution that mortgage bond purchases alone may not be enough to significantly reduce rates without broader improvements in housing supply.

Credit: CNN Newsource

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