President Trump Instructs Government To Buy $200 Billion in Mortgage Bonds in a Bid To Make Homes More Affordable

President Donald Trump is "instructing" the federal government to purchase $200 billion in mortgage bonds in a move that he vows will "drive rates down" and "make the cost of owning a home more affordable."

Trump, 79, issued the announcement in a post shared on his Truth Social account, in which he accused former President Joe Biden's administration of "ignoring the housing market."

"Everything was broken, but I, as President of the United States, have already fixed it!" he wrote. "Now, I am giving special attention to the housing market."

The president went on to say that Fannie Mae and Freddie Mac, the two mortgage companies under government conservatorship, currently have "$200 billion in cash" that will be used to fund the purchase of the bonds.

"This will drive mortgage rates down, monthly payments down, and make the cost of owning a home more affordable," he promised. "It is one of my many steps in restoring affordability, something that the Biden administration absolutely destroyed."

Trump did not share any further details about a potential timeline for these purchases—nor did he say whether they will be made all at once, or spread out over a specific period of time.

Despite his vow that the move will improve affordability and lower rates, which currently sit at 6.16%, Realtor.com® senior economist Jake Krimmel warns that there may be flaws in Trump's plan, expressing skepticism that "this would move mortgage rates in a large and sustained way."

"Details are sparse but ... a one-time infusion of $200 billion—or a series of smaller purchases that add up to it—are not likely to change the mortgage market's long-term pricing," he says.

Krimmel notes that steps like this have been taken in the past during times of particular economic hardship, when the Federal Reserve bought mortgage bonds to temporarily reduce rates, allowing existing homeowners to refinance.

For example, the Fed dramatically increased its purchases of mortgage-backed securities (MBS) during the COVID-19 pandemic as part of its "quantitative easing" program. It currently holds around $2 trillion in MBS, down from $2.7 trillion in June 2022.

However, this has, in some cases, led to a lock-in effect, which leaves homeowners who secured mortgage rates well below today's levels feeling as though they cannot move out of fear of incurring higher monthly payments.

"The reason these purchases do bring rates down when the Fed takes a similar action is because investors know demand for MBS will be steady and predictable," Krimmel explains.

"This could bring rates down in the short run by a small amount, but to really move mortgage markets, you would need large, sustained, and credible asset purchases."

Krimmel further notes that "getting inflation under control" is also a key step to lowering mortgage rates in the long term.

"As the administration continues to meddle in the housing market and wade its way into the monetary policy space, that's more likely to spook investors and raise inflation expectations—the opposite of what's sorely needed," he adds.

However, Bill Pulte, director of the Federal Housing Finance Agency, praised Trump's announcement.

"We are on it. Thanks to President Trump, Fannie and Freddie will be executing," Pulte wrote on X.

The announcement comes around three weeks after Trump acknowledged a "conflict" between his vow to improve affordability and his desire for homeowners to retain their record-high levels of equity.

Speaking in the Oval Office on Dec. 18, Trump said he wants to prevent home values from falling for existing homeowners, particularly older Americans.

"I don't want to knock those numbers down, because I want them to continue to have a big value for their house. At the same time, I want to make it possible for young people out there and other people to buy housing. In a way, they're at conflict," he said.

"In other words, you create a lot of housing all of a sudden, and it drives the housing prices down. So I want to take care of the people that have houses that have a value to their house that they never thought possible, that have sort of made them wealthy and happy, and especially in their later years. Got to be careful with that. I want to keep them up. At the same time, I want to make it possible for people to go buy houses," he continued.

Trump has repeatedly vowed to bring down housing costs and expand homeownership to millions more families. But if home prices decline outright, then he risks alienating homeowners, who are typically older and more conservative than renters.