January 10, 2026 — In a dramatic move that’s sending shockwaves through the housing market, U.S. 30-year fixed mortgage rates dropped sharply to 5.99% on January 9, marking the lowest level since February 2023 — nearly three years ago!
The plunge came just one day after President Donald Trump announced on Truth Social that he is instructing government-backed mortgage giants Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities (MBS), commonly known as mortgage bonds.
“This will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable,” Trump posted, framing the directive as a direct response to the housing affordability crisis he attributes to the previous administration.
Federal Housing Finance Agency Director Bill Pulte quickly confirmed the plan, noting that Fannie and Freddie would execute the purchases from the public market. Early execution has already begun, with reports of initial buys in the billions.
How the Bond Purchase Lowers Rates
When entities like Fannie Mae and Freddie Mac buy mortgage bonds, it increases demand for these securities. Higher demand pushes bond prices up, which in turn lowers yields — and mortgage rates closely track those yields.
Analysts estimate the $200 billion program could reduce 30-year rates by 10-50 basis points (0.1% to 0.5%), though the full impact depends on timing and market conditions. For context, the MBS market is massive (around $11 trillion), so while significant, this isn’t on the scale of the Federal Reserve’s pandemic-era purchases.
Prior to the announcement, rates hovered around 6.21%. The 22-basis-point drop to 5.99% (per Mortgage News Daily) was immediate and sharp.
Here’s a quick visual of recent rate movement (based on daily tracking data):
- Pre-announcement (Jan 8): ~6.21%
- Post-announcement (Jan 9): 5.99% — lowest since early 2023!
Experts note this brings rates back to levels not seen consistently since before the rapid hikes of 2022-2023, when inflation fears pushed averages above 7%.
Market Reaction and Broader Impact
- Homebuilder stocks surged on the news, as lower borrowing costs could boost demand for new homes.
- Purchasing power improves: For a median-priced home (~$425,000 with 20% down), a drop to sub-6% could shave $100+ off monthly payments compared to recent highs.
- Refinance activity, already up significantly year-over-year, could accelerate further.
However, some analysts caution the long-term effect may be modest compared to Fed actions, and rates could stabilize or rebound if inflation ticks up or economic data shifts.
Current Snapshot (as of January 9-10, 2026)
- 30-year fixed: ~5.99% (down sharply)
- 15-year fixed: Also fell notably, to around 5.55% in some reports
- Weekly Freddie Mac average (Jan 8): 6.16% — but daily figures show the fresh drop post-directive
This bold intervention is part of the administration’s broader push on housing affordability, including prior moves to limit institutional single-family home buying. With the 2026 midterms approaching, expect more focus on this voter-sensitive issue.
For homebuyers and homeowners: If you’ve been waiting on the sidelines, this could be the moment to explore options — but shop around, as individual quotes vary!
Leave a Reply