President Donald Trump said he is directing the federal government to buy $200 billion in mortgage bonds in order to push down mortgage rates at a time when Americans are anxious about home prices, according to CBS News.

“This will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable,” Trump wrote in a Truth Social post announcing the plan. Trump said Fannie Mae and Freddie Mac, which remain in government conservatorship, have $200 billion in cash that will be used to carry out the purchases.

Trump and his team have been under pressure to show they are responding to voter anger over housing affordability ahead of the November midterm elections, according to CBS News. Last month, Trump said he planned to unveil broader housing reforms, and this week he also talked about blocking institutional investors from buying single-family homes, according to the Associated Press, via Yahoo Finance.

How U.S. government’s $200 billion mortgage bond buy is supposed to work

At the most basic level, the plan relies on a simple bond‑market relationship. When a very large buyer steps in to purchase mortgage‑backed securities (MBS) at scale, prices for those bonds tend to rise and yields fall, which can translate into lower mortgage rates for borrowers, according to Brookings.

This is the same mechanism the Federal Reserve used during quantitative easing rounds after the 2008 financial crisis and again during the Covid shock, when the Fed bought large quantities of Treasuries and MBS to pull borrowing costs down after policy rates hit the effective lower bound.

President Donald Trump is directing the federal government to buy $200 billion in mortgage bonds.

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A Brookings Institution paper on post‑Covid quantitative easing found that the Fed’s $1.33 trillion in MBS purchases (nearly 90% of the growth in that market between 2020 and 2022) helped depress mortgage rates, spurred refinancing, and drove stronger housing demand.

A Federal Reserve Bank of Kansas City study cited in that paper estimated that a 10‑percentage‑point increase in the Fed’s share of total MBS holdings could reduce mortgage spreads by roughly 40 basis points, giving a sense of how powerful a centralized buyer can be.

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Market economists see similar potential dynamics here, even though Trump’s proposed $200 billion is much smaller than the Fed’s peak pandemic MBS portfolio. Redfin chief economist Daryl Fairweather estimated that a program of this size could shave around 0.25 to 0.5 percentage points off the typical 30‑year fixed mortgage rate.

This may deliver meaningful savings to households that are able to refinance or purchase while the program is active, according to CBS News.

Why President Trump’s MBS plan could hit homebuyers’ wallets for years

The same Brookings research that documents QE’s success in lowering mortgage rates also argues that large-scale MBS buying helped drive housing inflation, with home values rising sharply and contributing to overall price pressures the Fed later had to crush with aggressive rate hikes.

When cheaper mortgages pour gasoline on limited housing supply, prices can climb faster than incomes, making it harder for renters to buy and for current owners to trade up, even as monthly payments look more manageable in the near term. 

Trump’s $200 billion MBS plan “may reduce some households’ monthly payments by hundreds of dollars in 2026” but functions as a short-term policy stimulant that leaves the housing finance system more dependent on “too big to fail” entities and implicit government guarantees, according to analysts at Pepperstone.

Related: Redfin has key 2026 housing market prediction for real estate

Their research note warned that expanding Fannie and Freddie’s retained portfolios by that much could push against regulatory tolerance limits and amplify longer-term volatility in rates and housing, rather than fundamentally fixing affordability. 

Private strategists already expect the move to “reignite home prices’ inflation” given ongoing supply constraints, even if it succeeds in nudging borrowing costs lower in the near term, as reported by CBN News.

That combination can hurt homebuyers over time by locking younger buyers into higher price levels, reducing future mobility because more people are reluctant to give up cheap mortgages, and increasing the risk that the next bout of inflation or rate hikes hits an even more leveraged housing market.

What to watch as White House mortgage strategy rolls out

If you are trying to decide whether to move, refinance, or sit tight, I would keep a close eye on a few specific signals. 

  • Keep tabs on mortgage rates. Watch weekly data on average 30‑year mortgage rates from trackers such as Freddie Mac and the Mortgage Bankers Association to see whether this policy creates a sustained downward move or just a brief dip. In my experience, you do not want to build a long‑term plan on a one‑week headline reaction.
  • Listen to Fannie and Freddie. It is worth following what Fannie Mae, Freddie Mac, and their regulator, the Federal Housing Finance Agency, say about the pace and size of actual bond purchases, because announcements and social posts can get ahead of real implementation, according to Brookings. If the buying rolls out slowly or falls short of the full $200 billion, the impact on your rate could be more muted than the Truth Social rhetoric suggests, according to Pepperstone.
  • Track key housing indicators. Track indicators such as the S&P CoreLogic Case‑Shiller Home Price Index and the housing components of the Consumer Price Index to see whether cheaper financing is just inflating prices again. If price growth reaccelerates while your income is flat, that’s a sign this policy may be helping sellers and existing owners more than helping you as a buyer or upgrader. ​

How different households may be affected by government mortgage bond buy

If you already own a home with a relatively high‑rate mortgage, my view is that this policy could give you a tactical opportunity. A modest drop in rates might let you refinance into a lower fixed rate without overextending your term or pulling too much cash out, and that can put real money back into your monthly budget, according to Redfin’s analysis cited by CBS News.

However, it is important not to treat that lower rate as a license to stretch for extra debt on renovations or discretionary spending. 

If you are a first‑time buyer, I’d be more cautious. History and the research on past easing cycles suggest that when cheap money chases scarce housing, prices often rise faster than any benefit you get from a slightly lower rate, according to Brookings.

In that situation, it makes sense to focus on your own affordability threshold, not on the political promise: Buy only if the payment, even at a somewhat higher rate, fits comfortably into your budget over the long haul.

And if you are an investor or landlord, this may improve your near‑term financing costs while raising your longer‑term policy risk, since a bigger government footprint in mortgage markets gives future regulators more levers to pull, according to Pepperstone.

President Trump’s Truth Social post sells this as a clean win for housing, but the history of past MBS buying sprees suggests a trade: some short‑term relief in your payment now in exchange for a more distorted, more fragile housing market that could hit your wallet for years.

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