President Donald Trump on Friday celebrated a sharp decline in mortgage interest rates, declaring that "Even Fake News CNN is praising the DROP in Mortgage Interest Rates!" as fresh data signaled long-awaited relief for homebuyers squeezed by years of elevated borrowing costs.
The presidents remarks came after new figures from Freddie Mac showed the average 30-year fixed mortgage rate has fallen to its lowest level since September 2022, easing a key pressure point in an economy still wrestling with inflation and housing shortages. According to Newsmax, Trump highlighted the development in a Truth Social post late Friday, seizing on CNNs coverage of the rate slide after weeks of his own public pressure on policymakers to bring borrowing costs down.
Freddie Mac reported that the average 30-year fixed mortgage rate dropped to 6.06% for the week ending Jan. 15, down from 6.16% the previous week and well below the 7.04% level recorded a year earlier. The government-backed mortgage giant noted that rates have not been this low since September 2022, a shift that could help unlock a housing market that has been effectively frozen by high financing costs and limited supply.
Sam Khater, chief economist at Freddie Mac, said the decline is already translating into renewed activity from both prospective buyers and existing homeowners. "The impacts are noticeable, as weekly purchase applications and refinance activity have jumped, underscoring the benefits for both buyers and current owners," Khater said, adding, "Its clear that housing activity is improving and poised for a solid spring sales season."
The rate retreat follows Trumps very public campaign for aggressive intervention in the mortgage market, a stance that underscores his willingness to use federal tools to ease the burden on middle-class families. In a separate social media post earlier this month, Trump wrote: "I am instructing my Representatives to BUY $200 BILLION DOLLARS IN MORTGAGE BONDS. This will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable."
Trumps call for large-scale mortgage bond purchases echoes the kind of targeted market support that conservatives have sometimes criticized when deployed by Democrats, but his supporters argue that this approach is aimed squarely at restoring affordability for working Americans rather than expanding government control. The proposal also reflects a broader conservative concern that Washingtons mismanagement of inflation and overregulation has priced too many families out of homeownership, a traditional pillar of economic stability and personal independence.
Susan Wachter, a real estate professor at the University of Pennsylvanias Wharton School, told Reuters that such purchases could be exerting short-term downward pressure on mortgage rates, though she cautioned that the full scale of any buying remains unclear. She noted that while she had not yet seen activity on the order of the $200 billion figure Trump cited, the market appears to be responding to expectations of looser financial conditions and a potential policy shift favoring borrowers.
On the ground, there are early signs that the housing market is beginning to thaw after a prolonged freeze driven by the so-called lock-in effect, in which homeowners with ultra-low pandemic-era mortgages have been reluctant to sell. The National Association of Realtors reported that existing-home sales rose 5.1% in December from November, marking the fourth consecutive monthly increase and suggesting that lower rates are starting to coax both buyers and sellers back into the market.
Prices, however, remain stubbornly high, reflecting years of underbuilding and regulatory barriers that have constrained supply in many parts of the country. The median existing-home sales price reached $405,400 in December, up 0.4% from a year earlier, a modest gain that nonetheless keeps ownership out of reach for many younger and first-time buyers already grappling with high taxes, student debt, and elevated living costs.
Some economists and housing analysts warn that cheaper financing alone will not resolve the nations affordability crisis if policymakers fail to address the chronic shortage of homes. They argue that without serious efforts to expand supplythrough deregulation, faster permitting, and incentives for private constructionlower rates could simply fuel further price increases, particularly in high-demand, heavily regulated blue-state markets.
Federal Reserve Chair Jerome Powell has acknowledged the structural problem, conceding that "housing supply is low" even as borrowing costs begin to ease from their recent peaks. His comments underscore a tension in current policy: while the Fed can influence interest rates, it cannot by itself fix the zoning rules, environmental mandates, and bureaucratic hurdles that conservatives say have strangled new construction for years.
Private-sector analysts echo that concern, warning that rate relief, while welcome, is not a cure-all for a market distorted by years of policy missteps. Zillow Chief Economist Skylar Olsen cautioned that "Lower mortgage rates won't alleviate the housing market's underlying issues of affordability and inadequate supply," a view that aligns with conservative calls to tackle regulatory overreach and unleash the free market to build more homes.
Industry leaders also point to the lingering impact of the lock-in dynamic, which continues to limit the number of existing homes available for sale despite improving financing conditions. Mortgage Bankers Association CEO Bob Broeksmit observed that "The lock-in effect continues to suppress existing inventory levels," even as Freddie Macs Khater reported that "weekly purchase applications and refinance activity have jumped."
For conservatives, the latest data bolster the case for policies that prioritize homeownership, reduce government-imposed barriers, and harness market mechanisms rather than expanding bureaucratic control. Trumps focus on driving down mortgage ratescombined with earlier proposals such as allowing Americans to tap 401(k) savings for down paymentsfits into a broader agenda aimed at restoring the American Dream of owning a home, particularly for young families and middle-income earners.
The emerging debate now centers on whether Washington will pair lower borrowing costs with serious reforms to boost supply, cut red tape, and encourage private investment in new housing. With rates at their lowest point in more than three years, and with Trump insisting that "This will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable," the coming months will test whether policymakers are prepared to move beyond rhetoric and embrace a pro-growth, pro-ownership strategy that addresses both sides of the affordability equation.
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