On Thursday, January 8, President Trump directed the Fannie Mae and Freddie Mac to purchase $200 billion of their own mortgage-backed securities (MBS) in order to lower mortgage rates. Mortgages rates fell nearly 0.2% the subsequent day, ending the day at 5.99%. NAR has advocated for the government, including the GSEs, to expand their MBS purchases to bring down mortgages rates, and applauds this move.
The Fed was the major purchaser of mortgages backed securities during the pandemic and for much of the decade prior. In 2022, the Fed began to pull out of the market leaving a vacuum of demand in its place. Rates rose as a result. And, in the fall of 2023, NAR wrote the Fed and Treasurypdf, urging them to wade into the market including directing Fannie Mae and Freddie Mac to increase purchases of their own MBS.
As NAR noted in its 2023 letterpdf, while positive, this pressure on rates must be accompanied by efforts to expand supply.