"During the speech, Trump highlighted that rates have already fallen from their 2025 highs of over 7% to a current three-year low of approximately 6.0%. To further drive down costs, he detailed a directive for Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities, a "wild card" move intended to narrow mortgage spreads and reduce borrowing costs for consumers."
"While the administration predicts rates will continue "falling fast," most independent analysts project a more gradual stabilization throughout 2026. Mortgage Bankers Association (MBA): Forecasts rates holding steady at 6.1% through most of 2026, with potential to reach 6.5% by year-end if fiscal pressures persist. National Association of Realtors (NAR): Projects an average of 6.0% for the year."
"The $200 billion purchase of mortgage bonds is designed to lower rates by increasing demand. However, economists warn the effect may be temporary if not supported by broader Federal Reserve monetary policy. Analysts note that other administration policies, such as new tariffs, could exert inflationary pressure, potentially offsetting rate cuts and keeping long-term yields elevated."
President Trump's February 24, 2026 State of the Union address highlighted mortgage rate improvements, noting rates have fallen from 2025 highs exceeding 7% to approximately 6.0%. The administration directed Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities to narrow spreads and reduce consumer borrowing costs. Current fixed-rate mortgages average around 6.0-6.3%. Independent analysts project gradual stabilization throughout 2026, with forecasts ranging from 6.0% to 6.5% depending on economic conditions. Key factors influencing rates include the bond-buying program's effectiveness, inflationary pressures from tariffs, and broader Federal Reserve monetary policy. The administration also proposed banning large institutional investors from purchasing single-family homes to increase housing inventory.
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