Episode summary
Fannie and Freddie to buy $200B in MBS to lower mortgage rates
HousingWire Daily
· · 12 min · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Trump’s directive for Fannie Mae and Freddie Mac to buy $200 billion in mortgage-backed securities is being framed as a way to keep mortgage rates lower, but Logan Mohtashami says the immediate market effect is likely modest rather than a full QE-style intervention. He argues spreads were already improving before the announcement, and that the move mainly adds support to an improving mortgage market rather than creating it from scratch.
Mohtashami says the more important effect is defensive: if bond yields rise in 2026, the GSE purchases could help limit the damage and prevent mortgage rates from breaking higher. He says the policy is best understood as “extra insurance” heading into the midterms, alongside other factors like lower oil prices and the administration’s broader push for cheaper borrowing.
He also points out that if spreads return to normal and the 10-year yield falls, sub-6% mortgage rates become more plausible. But he cautions that this is not the same as trillions in quantitative easing, and says the housing market still needs a demand-side response if policymakers want a bigger shift in affordability and homebuying activity.
Key takeaways
- Mohtashami says the $200 billion directive is not QE; it is a smaller, defensive move to support mortgage spreads.
- He says spreads were already improving and could make mortgage rates roughly 5.80% to 6% even without help from the 10-year yield.
- He argues the policy is meant to limit upside pressure on rates in 2026 and serve as “extra insurance” into the midterms.
- Mohtashami says if jobs data strengthens and yields rise, the spread support can reduce, but not eliminate, the damage.
- He expects the administration to pair this with a demand-side housing response because lowering rates alone is not the whole plan.
Notable quotes
“I think I might be wrong here. They they've already done like 50 or 70 billion already”
“This isn't like the QE where we're spending trillions of dollars of buying uh bonds and mortgage back securities”
“my first inclination is this is also somewhat of a defensive move as well because rates are near 6%”
“So again, remember the Ghostbuster thing theme we had, Lenny, Lenny, all those voters, you're going to save”
How the episode opens
Welcome everyone. My guest today is lead analyst Logan Moto Shami to talk about the announcement late Thursday that Trump has directed Fanny and Freddy to buy 200 billion in mortgage back securities to push mortgage rates lower. This is a special breaking episode and I want to thank our sponsor Trust and Will for making it possible. Logan, welcome back to the special edition podcast.
Yes, just about before I was about to go on stage today, we get the news that Trump announced that Freddy and Fanny um authorized $200 billion worth of purchase. I I think I might be wrong here. They they've already done like 50 or 70 billion already.
Uh, so I don't know if there's only 130 uh billion left on the cap. I might be completely wrong here because it's been a while since I've looked at what their what their charter was on this, but uh if if I'm right, they still have like 150 or 130 billion left to purchase off of that. If that's true, then of course mortgage back securities got a little bit better right off the news.
Uh let's bring some context into this uh discussion. Let's bring some context because what people really care about I think is like what does this mean for mortgage rates?
So the spreads were already getting better. Um we're only 20 to 40 basis points away from normal. This isn't like the QE where we're spending trillions of dollars of buying uh bonds and mortgage back securities.
So it's not going to be that type of uh uh mortgage market response. You know, my first inclination is this is also somewhat of a defensive move as well because rates are near 6%. Uh this prevents rates from really breaking up higher in 2026.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- mortgage rates
- mbs purchases
- gse action
- housing finance
Companies and tickers mentioned
- FNMA
- FMCC
- Fannie Mae
- Freddie Mac
Watch the episode
Watch “Fannie and Freddie to buy $200B in MBS to lower mortgage rates” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from HousingWire Daily
-
The headlines impacting mortgage rates -
Has housing demand already changed with lower rates? -
How midterms and jobs week will affect rates -
Preparing for Q1 growth in reverse mortgages -
A clear pathway to sub-7% mortgage rates for Thanksgiving? -
Mortgage rates, inflation and those homeowner vacancy numbers
HousingWire Daily, this episode and its artwork belong to HousingWire. Octagon is not affiliated with the show; this page is an independent summary.
