Housing-related stocks jumped after President Trump said he plans to direct a massive purchase of mortgage bonds in an effort to push borrowing costs lower. The announcement sparked an after-hours rally Thursday that carried into early Friday trading, lifting mortgage lenders, real estate platforms, and homebuilders.
The proposal lands as the U.S. housing market remains under heavy strain from elevated mortgage rates and historically weak affordability.
Trump Targets Mortgage Rates
In a post on Truth Social, Trump said he is instructing his representatives to buy $200 billion in mortgage bonds, arguing the move would “drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable.”
According to Bill Pulte, head of the Federal Housing Finance Agency, the purchases would be carried out by Fannie Maeand Freddie Mac, the two government-sponsored enterprises that dominate the U.S. mortgage market.
Stocks Catch a Bid
Investors wasted no time reacting. Shares of Rocket Companies $RKT ( ▲ 9.65% ) and UWM Holdings $UWMC ( ▲ 13.8% ) were both up around 6% early Friday, while LoanDepot $LDI ( ▲ 19.26% ) surged as much as 16.8%. Online real estate platform Opendoor Technologies $OPEN ( ▲ 13.38% ) jumped more than 8%, and homebuilder Lennar $LEN ( ▲ 8.85% ) posted more modest gains.
The rally reflects hopes that even a modest decline in mortgage rates could unlock pent-up demand across housing-related industries.
How Much Firepower Is Really There?
Trump claimed Fannie Mae and Freddie Mac are now worth “many times” what they were during his first term, leaving them with “$200 billion in cash.” Filings suggest that figure is more about liquidity than cash on hand.
According to Reuters, the two firms held less than $17 billion in combined cash and cash equivalents as of September 30, but controlled roughly $192 billion when other liquid assets are included. Pulte told Reuters the firms have “ample liquidity” to execute the purchases.
The Wall Street Journal also noted that both firms still have balance sheet capacity. Each is allowed to hold up to $225 billion in mortgage-backed securities, but together currently hold about $247 billion, leaving close to $200 billion in remaining room.
Will It Actually Move Rates?
Economists are divided on the impact. Some estimate the bond purchases could lower mortgage rates by roughly 0.25 percentage points, while others expect a smaller effect closer to 0.10 to 0.15 points.
Even a modest drop would matter. Thirty-year mortgage rates are still hovering around 6.2%, home sales are at their lowest levels since the 1990s, and homeowners are experiencing the worst lock-in effect in more than 40 years.
Trump has teased broader housing reforms, including a proposal to ban large institutional investors from buying single-family homes. For now, markets are focused on the immediate takeaway: cheaper mortgages, even slightly cheaper ones, could be enough to shake loose a frozen housing market.