‘Trump is going after the housing market’ and mortgage rates plunge
President Donald Trump has made the housing market a new policy focus, and recent actions by his administration appear to be pushing mortgage rates sharply lower, offering potential near-term relief for homebuyers.
The average interest rate on a 30-year fixed mortgage fell last week to 5.99%, its lowest level since February 2023, according to data compiled by The Kobeissi Letter and Mortgage News Daily.
The drop didn’t come in isolation. It followed an order from President Trump directing the U.S. government to purchase $200 billion in mortgage-backed securities, a move that increases demand for housing-linked bonds and typically pushes mortgage rates lower by reducing borrowing costs for lenders.
The decline in rates also came days after Trump announced a ban on institutional purchases of single-family homes, a policy aimed at reducing competition from large investors and private equity firms that often outbid individual buyers.
Supporters argue the move could ease price pressure in entry-level housing markets and improve access for first-time homebuyers.
Taken together, the measures represent a coordinated intervention in the housing market — lowering financing costs while restricting investor demand.
“Trump is going after the housing market,” The Kobeissi Letter wrote.
It's official:
undefined The Kobeissi Letter (@KobeissiLetter) January 9, 2026
Mortgage rates have just dropped to their lowest level in nearly 3 years amid President Trump's latest actions.
The average interest rate on a 30-year mortgage in the US is down to 5.99%, the lowest since February 2023.
This comes just days after President Trump… pic.twitter.com/xBnH69Q0Tn
Mortgage rates still have room to fall, but likely winners are already emerging
While mortgage rates remain well above the ultra-low levels seen during the pandemic, a meaningful decline driven by President Trump’s recent actions could still produce clear winners.
Those most likely to benefit include first-time buyers struggling to enter an expensive housing market, middle-income households, and existing homeowners looking to refinance.
According to UBS, the $200 billion in mortgage-backed securities purchases could reduce mortgage rates by as much as 25 basis points — a move that may be sufficient to draw more buyers into the market and ease some affordability pressures.
For example, the National Association of Realtors estimates that a further drop in mortgage rates to 5.9% would save the average homebuyer about $118 per month on a $425,000 home. For buyers on the edge of affordability, every dollar matters.
The timing is notable, as the housing market is already beginning to emerge from its prolonged cooling phase. Mortgage rates above 6% now make up a larger share of outstanding loans than the ultra-low rates below 3% issued during the pandemic era, according to data from Reventure.
That transition suggests the so-called “golden handcuffs” that have kept many homeowners locked into low-rate mortgages may be loosening. As rates fall and refinancing becomes more attractive, more homes could come onto the market, potentially increasing supply and reigniting buying activity.