Bond markets have been rocked by breaking news from the Trump administration last week, including a new drive by Fannie Mae and Freddie Mac to purchase mortgage-backed securities. Here, I’ll break down what we know so far and what it’s likely to mean for homebuyers and sellers.
$200B in mortgage-backed securities
2026 is already proving to be a busy news year for the housing market, starting with our first number to know: $200 billion. That’s the total value of mortgage-backed securities that President Trump announced on Jan. 8 he’s directed “his Representatives” to purchase, with a stated goal of reducing mortgage interest rates.
A big new buyer of mortgages will tend to bid their prices up, which — for bonds — means pushing interest rates down.
For the past three years, mortgage rates have been unusually high relative to the benchmark 10-year Treasury rate, which has been gradually compressing back to a normal range, and this buying spree, evidently by Fannie Mae and Freddie Mac, should accelerate that process of shrinking the spread.
Markets have taken this announcement quite seriously.
6.06% — lowest mortgage rate reported in almost 3 years
In just the first day of trading after Trump’s announcement, mortgage rates dropped 15 basis points, bringing us to our second number to know right now: 6.06 percent. That was Mortgage News Daily’s average 30-year mortgage rate on Friday, Jan. 9, and that marks the lowest mortgage rate they’ve reported in almost three years.
Now, trading has been unusually volatile, and there are still a lot of unanswered questions about this new program, but there’s no doubt that in the short term, it has begun moving markets, and I think some highly qualified buyers and sellers who start to see mortgage rates in the 5 percent range will be more motivated to transact this spring.
56K jobs lost during Q4
Another number to know right now: 56,000. That’s the number of jobs lost on net over the fourth quarter of 2025, capping a year of slowing, and finally shrinking, payrolls in the U.S. economy.
Now, other data shows economic activity held up fine in the fourth quarter, so this is not the beginning of a recession, but slowing job growth could help explain why home purchases disappointed in the fourth quarter, despite lower mortgage rates than in late 2024.
Speaking of housing, 2025 ended with the housing market still just shy of an important benchmark I’ve been watching: the moment when active inventory recovers to its pre-pandemic, 2019 levels. The year ended with just under a million active listings, versus just over a million six years ago on the eve of the COVID pandemic.
That is still up substantially from this time last year, but the trend of year-over-year listing growth clearly slowed over the course of 2025. That helps explain why 2025 went down as the year of cooling and normalization, but not anything like a fire sale or glut of unsold homes.
Rather, it’s a market that made a lot of progress back toward normalcy, foretelling a healthy, balanced market in the year ahead.
Jeff Tucker is the Principal Economist for Windermere Real Estate in Seattle, Washington. Connect with him on X or Facebook.
