Mortgage rates fall near 6% with GSEs set to boost MBS purchases

"Rates briefly dipped below 6% on Friday, prompting lenders to begin preparing for a potential refinance surge. In an email interview with HousingWire, Phil Crescenzo Jr., Southeast division vice president at Nation One Mortgage Corp., said that Trump's announcement was welcomed immediately by the bond market as a positive sign for the future. But he cautioned that was too early to know whether rates would remain lower for longer."

"Markets often react to change in trajectory and indicators that point to stability, Crescenzo said. If future purchases were projected or announced, this could create an increase in bond price, resulting in lower interest rates to the consumer. While relatively small changes in rates might not spur every purchase or refinance borrower to come off the fence, Crescenzo said those with high rates who've waited a while are now in prime position to act."

"By purchasing hundreds of billions of dollars in MBS, the government-sponsored enterprises (GSEs) could spur the lower mortgage rates that Trump and other officials have been clamoring for. Despite lowering benchmark interest rates by a total of 75 bps in 2025, the actions of the Federal Reserve have yet to have a transformative effect. But compared to early September, prior to the three subsequent Fed cuts, 30-year rates are about 40 bps lower."

President Trump's directive for Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities prompted bond-market buying and a brief dip in 30-year mortgage rates below 6%. Lenders began preparing for potential refinance demand. Industry observers noted the announcement was welcomed by the bond market but cautioned it was too early to know if lower rates would persist. Projected or announced future MBS purchases could raise bond prices and translate into lower consumer mortgage rates. Even modest rate moves can produce significant monthly savings for borrowers with higher existing rates. GSE purchase increases and Fed rate cuts have contributed to roughly 35–40 basis points of recent decline in 30-year rates.

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