Trump’s Mortgage Plan Brought Rates Below 6%—Here’s The Proof

by | Jan 9, 2026 | General

For the first time since 2022, the average 30-year fixed mortgage rate dipped below the psychological 6% barrier, landing at 5.99% on Friday.

This data, reported by Zillow, comes with even better news: experts expect mortgage rates to fall further in the near term.

The $200 Billion Intervention

In an attempt to drive mortgage rates down, President Donald Trump on Thursday announced a directive for Fannie Mae (OTC:FNMA) and Freddie Mac (OTC:FMCC) to purchase $200 billion in mortgage-backed securities (MBS). 

Trump’s strategy is to leverage the $200 billion in cash reserves held by the government-sponsored enterprises (GSEs) to increase demand for mortgage bonds.

By increasing demand for mortgage bonds, the GSEs drive bond prices up, which causes yields—and consequently, mortgage rates—to fall. 

Fannie and Freddie have already been moving in this direction, having increased their retained mortgage holdings by roughly $50 billion in the latter half of 2025, 

Compressing the Mortgage Spread

A primary goal of the intervention is to address the mortgage spread—the difference between the 10-year Treasury yield and the 30-year fixed mortgage rate.

And the strategy has already proven successful. 

Lance Lambert, co-founder and editor-in-chief of ResiClub, pointed to “an immediate bond market reaction” following Trump’s announcement late Thursday afternoon, noting that Friday’s spread of 187 bps is close to the historic average of 176 bps. 

This tightening of the spread led to a “BIG ONE-DAY MORTGAGE RATE DROP,” to 5.99%, Lambert explained. 

Matt Graham, founder and CEO of MBS Live, also pegged the drop to Trump’s announcement and said he expects even lower rates soon. 

“There are diminishing returns to additional MBS purchases as this spread continues to compress, but it’s not overly optimistic to think it could result in another 50bps of tightening in the best case,” Graham said. 

“This means that today’s 6.125% mortgage rates could fall to 5.625% without any movement in the broader bond market,” he added. 

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