Mortgage refinance demand jumps 40% after Trumps $200B bond-buying spree briefly sinks mortgage rates
Mortgage refinance demand jumped 40% higher last week after President Trump ordered a $200 billion bond-buying spree – briefly sending mortgage rates below 6% for the first time in years.Refinance demand was 128% higher than the same week one year ago as homeowners rushed to take advantage of sinking 30-year fixed mortgage rates, which fell to 5.87% on Monday. “I am instructing my Representatives to BUY $200 BILLION DOLLARS IN MORTGAGE BONDS,” Trump wrote in a Jan.8 post on Truth Social.“This will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable.”Mortgage rates typically move very slowly, only inching down by hundredths of a percentage point a day – but they plummeted after Trump’s social media post.Later that day, Federal Housing Finance Authority Director Bill Pulte said in a post on X that “Fannie [Mae] and Freddie [Mac] are the entities that will do the purchases.”He also told reporters on Jan.
9: “We put in a $3 billion buy already.”Total mortgage application volume soared 28.5% last week from the previous week, which was adjusted for the holiday, according to the Mortgage Bankers Association’s index.Applications for a mortgage to purchase a home also rose 16% for the week and were 13% higher than the same week a year earlier, likely due to people returning after the holidays.Mortgage rates have since bounced back above 6% as analysts anticipate higher oil prices. The rate on a 30-year fixed mortgage hit 6.10% on Wednesday, according to the Mortgage Research Center.The average 15-year fixed mortgage rate was 5.25% and a 30-year jumbo mortgage was 6.70%.The massive bond-buying spree proposed by Trump would give lenders more money to lend to homebuyers – creating a higher supply of cash that allows interest rates to fall.UBS analysts estimated the latest round of bond purchases could help push 30-year fixed mortgage rates down more than a fifth of a percent.
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