CNBC’s Jim Cramer warned on Jan. 20, 2026, that a sharp rise in mortgage rates could quickly reverse the U.S. housing market‘s emerging recovery, just as lower borrowing costs have begun to unlock buyer demand and seller activity.
Mortgage Rates Hit Three-Year Low
In a post on X, Cramer stated, “Can’t afford to have mortgage rates go sky high here. The housing market was just about to thaw…” His comment reflects widespread concern that the recent dip below 6%—driven by aggressive policy intervention—may prove short-lived.
The average 30-year fixed-rate mortgage fell to 6.06% for the week ending Jan. 15, 2026, according to Freddie Mac’s Primary Mortgage Market Survey—the lowest level since late 2022.
The 15-year fixed rate dropped to 5.38%. Purchase applications and refinance volume jumped noticeably in response.
The decline accelerated after President Donald Trump directed Fannie Mae (OTC:FNMA) and Freddie Mac (OTC:FMCC) to purchase $200 billion in mortgage-backed securities (MBS).
The intervention increased demand for MBS, narrowed the spread to Treasuries, and briefly pushed some daily quoted rates to 5.99%. Industry observers described the market as “poised for a solid spring sales season” if rates remain cooperative.
Policy Gains Spark Backlash And Caution
While the move provided immediate relief for homebuyers and locked-in homeowners reluctant to sell, it drew sharp criticism. Economists warned that diverting funds from Treasury purchases could push longer-term yields higher and rekindle inflation.
Peter Schiff called the strategy a form of credit misallocation that props up already elevated home prices rather than solving affordability. Mohamed El-Erian labeled it “People’s QE,” highlighting risks of political interference in markets.
Cramer’s alarm centers on the fragility of the current thaw: any rebound in rates—potentially fueled by tariff-driven inflation or shifting Fed expectations—could re-lock homeowners, shrink inventory, and stall momentum.
What’s Next For Buyers And Sellers
As of Jan. 20, national averages hovered near 6.0–6.2% depending on the lender and report. The market remains sensitive to upcoming inflation readings, Fed commentary, and any follow-through on housing-related policies.
For now, the lower-rate environment has eased pressure on both first-time buyers and existing owners, but Cramer’s warning underscores how rapidly conditions can shift.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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