Mortgage Rates Under 6%? What's Next?

Breaking Down Trump’s New Mortgage-Backed Securities Plan — What It Means for Home Buyers

Recently, President Trump announced a new housing strategy aimed at lowering mortgage interest rates by directing Fannie Mae and Freddie Mac — the two government-sponsored enterprises that help finance most U.S. home loans — to buy up to $200 billion in mortgage-backed securities (MBS). These MBS are bundles of home loans that lenders sell on the secondary market to free up cash so they can make more loans. The theory behind the plan is that increased demand for these bonds pushes bond prices up and yields down, which in turn can help pull mortgage rates lower. Early market reactions suggest some immediate rate movement — the average 30-year fixed mortgage rate dipped under 6% after the announcement — the lowest levels seen since 2023.

So how does this actually help you? Lower mortgage rates mean lower monthly payments and potentially greater buying power — whether you’re looking to refinance an existing mortgage or buy a new home. Even a quarter-point drop in interest rate can make a meaningful difference: for many buyers, this can mean qualifying for a larger loan amount or reducing what you pay each month. That’s especially important in today’s market, where home prices remain high and affordability is tight.

However, experts caution that the impact may be modest and potentially short-lived. The U.S. mortgage market is enormous — roughly $11 trillion in MBS outstanding — so a $200 billion buy, while significant, may only nudge rates moderately lower and over a limited period. It’s also possible that if lower rates bring more buyers into the market, home prices could rise in response, which could offset some of the affordability gains.

What does this mean for your home-buying timeline?

• Refinancers may find this an opportune moment to check current rates and talk to their lender about locking in a lower payment.

• Potential buyers should consider that even if rates dip further, increased competition might push prices up — meaning waiting might not always save money. The key is balancing your personal financial readiness with market trends rather than timing the market perfectly.

In short, Trump’s plan could help soften mortgage costs, but it’s not a magic bullet for affordability. If you’ve been watching rates and are ready financially — this potential shift might give you that extra edge now rather than later.

Reach out to me if you're thinking of buying or selling in 2026. Change is in the air!

Joe Capozzoli

(617) 733-6284

joe@lowcountryliveoak.com