Trump’s New Plan Aims To Tackle Rising Mortgage Rates

President Donald Trump announced Thursday on social media that he is directing the federal government to buy $200 billion in mortgage bonds. He says the plan is meant to lower mortgage rates at a time when many Americans are struggling with high home prices.

Trump and the White House are trying to show voters they’re taking action on affordability ahead of the midterm elections in November. Across the country—including Wyoming—home prices have been rising faster than incomes for years, in part because there aren’t enough homes being built. That shortage makes it harder for renters to buy their first home and for current homeowners to move up to a bigger place. The problem has persisted since Trump’s first term and stretches back to the recovery from the 2008 housing crash.

Trump said the money for the bond purchases would come from the cash reserves of Fannie Mae and Freddie Mac, the two mortgage companies under federal oversight.

“This will drive mortgage rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable,” Trump wrote online.

White House officials have not given a timeline for when the bond purchases will happen.

Mortgage rates in the U.S. have been hovering around 6.2%, according to Freddie Mac. That’s down from nearly 7% last year but still higher than the 3% or lower rates some homeowners locked in during the pandemic. Lower rates make monthly payments cheaper, which could help some buyers.

Experts warn the move is only a partial fix. Daryl Fairweather, chief economist at Redfin, says the government purchase might cut rates by a quarter to half a percentage point—but it won’t fix the bigger problem: there simply aren’t enough homes for sale.

“Lowering mortgage rates a little may encourage some extra buying, but it won’t solve the housing shortage,” Fairweather said.

Trump’s plan would use the cash reserves of Fannie Mae and Freddie Mac, which are meant to act as a safety net if the housing market or economy takes a serious hit. Using that money now could make the companies more vulnerable if another downturn occurs.

The Federal Reserve also holds trillions of dollars in mortgage-backed securities, though it has been gradually reducing that amount since the pandemic.

In Wyoming, where housing is often more limited outside the bigger towns, even a small dip in mortgage rates could make buying a home easier—but supply issues remain a challenge. Many locals in towns like Casper, Cheyenne, and Jackson still face high prices and limited listings.

Trump has also said he wants to block large investment firms from buying up homes, a move that could affect markets in smaller towns and rural areas where investors have increasingly bought rental properties.