Mortgage rates fall below 6% for first time since 2023 after Trump orders $200B bond buying

Mortgage rates fell below 6% for the first time in years after President Trump ordered the purchase of $200 billion worth of mortgage bonds in his latest attempt to tackle the housing crisis.

The average rate for a 30-year fixed residential mortgage fell to 5.87% on Monday, according to Zillow. Rates had dipped to 5.99% on Friday – its first time below 6% since February 2023, according to Mortgage News Daily.

That means rates for the average 30-year mortgage have dropped more than 1% over the past year.

President Trump last week ordered the purchase of $200 billion worth of mortgage bonds. AFP via Getty Images

Interest rates for a 15-year fixed mortgage also fell to 5.25% on Monday.

Borrowers with good credit scores should be able to find a rate under 6%, and possibly even lower numbers if they shop around at competitive lenders.

Mortgage rates typically move very slowly, only inching down by hundredths of a percentage point a day – but they plummeted after Trump last week announced the purchase of $200 billion worth of mortgage bonds. 

“I am instructing my Representatives to BUY $200 BILLION DOLLARS IN MORTGAGE BONDS,” he wrote in a post on Truth Social Thursday.

“This will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable.”

Later that day, Federal Housing Finance Authority Director Bill Pulte said in a post on X that “Fannie [Mae] and Freddie [Mac] are the entities that will do the purchases.”

He told reporters on Friday, “We put in a $3 billion buy already.”

The average rate for a 30-year fixed residential mortgage fell to 5.87% on Monday, according to Zillow. AP

Fannie and Freddie have combined holdings of mortgage securities worth more than $230 billion after buying tens of billions of dollars worth of mortgage bonds over the past few months. Another $200 billion in mortgage bonds would nearly double their holdings.

These purchases give lenders more money to lend to homebuyers – creating a higher supply of cash that allows interest rates to fall.

This latest round of bond buying could help sink 30-year fixed mortgage rates down more than a fifth of a percent, UBS analysts said in a note to clients Friday.

But the average rate of outstanding US residential mortgages is 4.4% – far below the rate for a new mortgage, likely incentivizing homeowners to hold onto their properties.

Trump’s bond buying would only account for about 1.4% of the roughly $14.5 trillion mortgage market, JPMorgan Chase analysts said in a note Friday.

“Similar to our view on President Trump’s post regarding a ban on institutional investors buying homes, we do not believe this initiative will have any significant impact on the housing market,” the analysts wrote.

They were referring to Trump’s announcement last week that he was taking steps to ban large investors from buying and then renting out single-family homes. He did not say exactly how his plan would work, but the policy marked a major new effort to lower the cost of homeownership.

Over the past decade, large investors and private-equity firms have bought up hundreds of thousands of single-family homes. 

The potential impact of Trump’s policy has been up for debate.

Firms that own 100 or more single-family homes only control about 2% of the nation’s single-family housing stock, according to John Burns Research and Consulting