WASHINGTON, D.C. — In a sweeping attempt to dismantle the “rate lock” that has frozen the U.S. housing market for years, President Donald Trump has authorized a $200 billion purchase of mortgage-backed securities (MBS).2 The aggressive federal intervention has already achieved a major psychological milestone: as of Monday, January 12, 2026, national mortgage rates have dipped below 6% for the first time since February 2023.
The directive, executed through Fannie Mae and Freddie Mac, utilizes the significant cash reserves of the government-sponsored enterprises to inject liquidity directly into the housing finance system.3 By boosting demand for mortgage bonds, the administration is forcing borrowing costs down for everyday Americans.4+1
Immediate Impact: A Sub-6% Reality
Following the announcement on Friday, the average 30-year fixed-rate mortgage fell 22 basis points to 5.99%.5 While some lenders saw rates tick back toward 6.06% by Monday morning, the market remains in its most favorable position for buyers in nearly three years.
- Purchasing Power Surge: For a homebuyer on a $3,000 monthly budget, this rate drop adds approximately $14,000 in purchasing power compared to just one month ago.6
- Refinance Wave: The shift has sparked a 133% year-over-year increase in refinance applications, as homeowners who took out loans at 7% or 8% in 2024 rush to lock in lower payments.7
- Fannie and Freddie Liquidity: Despite initial skepticism, Federal Housing Finance Agency (FHFA) Director Bill Pulte confirmed the agencies have nearly $200 billion in combined liquidity to execute the bond-buying program without taxpayer intervention or Federal Reserve assistance.8
The “Affordability Offensive”
The bond-buying program is the centerpiece of a multi-pronged housing strategy. In tandem with the $200 billion purchase, the administration has proposed a ban on large institutional investors—defined as those owning over 1,000 properties—from purchasing single-family homes.
| Metric | December 2025 | January 12, 2026 | Impact |
| Mortgage Rate | 6.35% | 5.99% | -0.36% |
| Monthly Payment* | $2,720 | $2,537 | -$183 / Month |
| Buying Capacity | $466,000 | $479,750 | +$13,750 |
| *Based on median-priced U.S. home of $433,000.9 |
Expert Analysis: Sustainable Relief or Temporary Reprieve?
While the White House hails the move as a “restoration of the American Dream,” market analysts offer a more cautious outlook.
- Supply vs. Demand: Economists at Redfin and Realtor.com warn that while lower rates help at the margins, they do not solve the underlying 4-million-home supply shortage.
- Price Pressure: There is concern that an influx of buyers, motivated by the sub-6% rates, could spark bidding wars that drive home prices higher, potentially negating the savings on interest.10
- Small-Scale Intervention: Compared to the Federal Reserve’s pandemic-era $2.7 trillion portfolio, this $200 billion move is relatively modest.11 Analysts suggest it may shave a total of 10 to 35 basis points off rates, but likely won’t return the market to 3% or 4% levels.
The Bottom Line: A Volatile Window for Buyers
For prospective homeowners, the message is clear: the current dip below 6% represents a significant, if potentially fleeting, opportunity.12 With the FHFA moving quickly to execute the bond purchases, the 2026 spring buying season is poised to be the most active—and competitive—in years.
