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Shares of US mortgage lenders jumped sharply after President Donald Trump announced plans for the government to buy USD 200 billion worth of mortgage-backed bonds to ease housing affordability pressures. The move aims to lower mortgage rates and monthly payments at a time when high borrowing costs and elevated home prices have kept buyers on the sidelines. Companies including loanDepot, Rocket Companies, UWM Holdings and Opendoor Technologies saw strong premarket gains following the announcement. The bond purchases are expected to be executed by Fannie Mae and Freddie Mac, the government-backed mortgage finance giants. Investors welcomed the policy signal, viewing it as a potential catalyst for reviving mortgage volumes after a prolonged slowdown in the US housing market.
US mortgage lenders rallied in premarket trading on Friday after President Donald Trump said his administration would move to buy USD 200 billion in mortgage-backed bonds in an effort to bring down housing costs and revive demand in the housing market. Advertisement
In a post on his Truth Social platform, Trump said he had ordered his representatives to carry out the bond purchases to reduce mortgage rates and monthly payments, addressing persistent affordability challenges faced by American homebuyers. I am giving special attention to the housing market, he wrote, noting that the measure was intended to make home ownership more accessible.
The announcement triggered a sharp reaction in mortgage and housing-related stocks. Consumer lender loanDepot surged about 17 per cent before the opening bell, while Rocket Companies gained roughly 6 per cent. UWM Holdings was up around 7 per cent, and online real estate platform Opendoor Technologies rose nearly 10 per cent, reflecting optimism that lower borrowing costs could revive loan demand and transaction activity.
US housing affordability has been under sustained pressure due to a combination of high mortgage rates and elevated home prices. This has kept many potential buyers out of the market, leading to subdued housing activity and sluggish mortgage origination volumes over the past few years. Policymakers have increasingly faced calls to intervene as the slowdown weighed on both consumers and the broader housing ecosystem.
US Federal Housing Finance Agency Director Bill Pulte said on social media platform X that Fannie Mae and Freddie Mac would execute the bond purchases. The two government-sponsored enterprises have been under federal conservatorship since 2008, following their bailout during the global financial crisis. In exchange for taxpayer support, the US Treasury received preferred shares, which have since generated billions of dollars in dividends.
Trump also referenced his earlier decision not to sell Fannie Mae and Freddie Mac during his first term, claiming that their value has increased significantly since then. Investors are now closely monitoring further policy actions and interest rate developments that could reshape the outlook for mortgage lenders earnings and housing market activity.
Earlier this week, Trump also said his administration was considering banning Wall Street firms from buying single-family homes, another measure aimed at cooling home prices and improving affordability.
Source - Reuters
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