President Trump said on social media Thursday that he is directing the federal government to buy $200 billion in mortgage bonds, a move he argued would help reduce mortgage rates at a time when Americans are worried about home prices.

Mr. Trump and the White House have been trying to show they are responding to voter concerns about affordability ahead of midterm elections in November. Home prices have generally risen faster than incomes because of a persistent construction shortfall, making it harder for renters to buy their first home and for existing owners to upgrade to a new property — a challenge that dates back to Mr. Trump's first term and the recovery from the housing market collapse that triggered the global financial crisis in 2008.

Mr. Trump last month said he planned to unveil housing reforms — and on Wednesday, he announced that he wants to block institutional investors from buying houses.

The president said Thursday that the two mortgage giants under government conservatorship, Fannie Mae and Freddie Mac, have $200 billion in cash that will be used to make the mortgage bond purchases.

"This will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable," he posted on Truth Social.

Federal Housing Finance Authority Director Bill Pulte, who oversees Fannie Mae and Freddie Mac, said on X the two government-run companies "will be executing" the president's request.

The Federal Reserve has, in the past, bought mortgage bonds during times of economic turmoil in order to help reduce interest rates, leading many homeowners to refinance into rates of 3% or less. The low rates of the recent past make these homeowners reluctant to sell their properties, depriving the market of inventory.

Additional mortgage purchases by Fannie Mae and Freddie could temporarily help lower mortgage costs, but that approach also could have unintended consequences, according to TD Securities analysts.

"We see this succeeding in the short term, though we believe it will reignite home prices' inflation given supply constraints," they said in a research note, alluding to a severe shortage of affordable housing in the U.S.

Daryl Fairweather, chief economist at the real estate brokerage Redfin, estimated to the Associated Press that the government purchases of mortgage debt could shave 0.25 to 0.5 percentage points off the rate for a 30-year fixed-rate mortgage. But she also cautioned that the purchases wouldn't address other factors driving high housing costs, like limited supply.

More than 75% of homes across the U.S. are unaffordable for most Americans, according to Bankrate, a personal finance site. Property data firm ATTOM found Thursday that in the last three months of 2025, median-priced single-family homes were less affordable than historical averages in 99% of the nearly 600 U.S. counties the company analyzed.

Mortgage rates have been averaging around 6.2%, according to Freddie Mac, which went into federal conservatorship along with Fannie Mae in 2008 when the U.S. economy crashed during the Great Recession. Thirty-year mortgage rates haven't been below 6% since September 2022.

Mortgage rates began to climb as inflation spiked coming out of the global pandemic, with the consumer price index hitting a four-decade high in 2022. The average mortgage rate is down from nearly 7% at the start of Mr. Trump's second term last year, yet the decrease has done little to reassure a public that feels pressure from the costs of housing, food and energy.

When interest rates fall it can become cheaper to service housing debt on a monthly basis. The reduced monthly payments can improve affordability for a period until home prices adjust in response to changes in the rates. There was roughly $21.1 trillion in outstanding mortgage debt as of the middle of last year, according to the St. Louis Federal Reserve.

Many homeowners took advantage of low interest rates during the pandemic to refinance their mortgages at rates of 3% or lower.

The plan to buy up hundreds of billions in mortgage bonds could also carry some risk for Fannie and Freddie because Mr. Trump would be spending the cash reserves that are supposed to help be a buffer against an economic downturn akin to what happened during the Great Recession. In a sense, Freddie Mac and Fannie Mae could be more vulnerable if anything negative happens to the housing market, meaning Mr. Trump is betting that possibility is highly unlikely.

Fannie and Freddie work by buying up scores of residential mortgages and repackaging them as mortgage-backed securities that can be sold to all kinds of investors. Collectively, they guarantee trillions of dollars' worth of mortgages.

In the past, the president has pushed to take Fannie and Freddie public. Supporters argue that move could generate hundreds of billions of dollars for the federal government, but critics warn it may push up mortgage rates by raising uncertainty about the two megafirms. 

But on Thursday, Mr. Trump appeared to rethink that plan, writing: "Because I chose not to sell Fannie Mae and Freddie Mac in my First Term, a truly great decision, and against the advice of the 'experts,' it is now worth many times that amount — AN ABSOLUTE FORTUNE — and has $200 BILLION DOLLARS IN CASH."