Fannie and Freddie Place Large Orders for Mortgage-Backed Securities

Fannie Mae and Freddie Mac have begun placing sizable orders to purchase mortgage-backed securities (MBS), an effort pushed by President Donald Trump to improve affordability in the housing market.

Bloomberg News reports that the two entities are placing major purchase orders for MBS, citing unnamed sources familiar with its plans. Earlier this year, Trump instructed them to buy up $200 billion in mortgage bonds. He said in January it would help drive down rates.

The impact of the buying spree remains to be seen, given the size of the market. Commercial banks in the U.S. currently hold about $2.7 trillion in MBS. And the Federal Reserve still holds more than $2 trillion in mortgage bonds.

Morgan Stanley later cautioned that the measure would have a limited impact. Joel Berner, Realtor.com® senior economist, had a similar conclusion.

"It’s difficult to see this proposal moving mortgage rates in a large or lasting way," Berner said in January when the plan was announced. "A one-time infusion of roughly $200 billion, or even a series of smaller purchases that add up to that figure, is unlikely to meaningfully alter long-term mortgage pricing."

Taming the volatility

A mortgage bond, more formally known as a mortgage-backed security, or an MBS, is a type of investment that packages together many home loans and sells them to investors. Fannie and Freddie would use their cash reserves for the purchases.

Trump's January announcement was a part of a broader housing affordability push that included several other ideas. He also issued an executive order to discourage institutional investors in the housing market. Trump has also been pushing the Fed to lower interest rates.

With several of those moves underway, mortgage rates began to fall in early 2026. But continued volatility, including with inflation and the new conflict in Iran, has seen rates rise again. The 30-year fixed mortgage rate averaged 6.11% on March 12 and rose further to 6.22% on March 19. Though, that's still below what it was in March 2025.