This post was originally published on this site.
Mortgage rates fell to their lowest level in more than three years this week after President Trump announced that Fannie Mae and Freddie Mac would buy $200 billion of mortgage bonds.
The average 30-year mortgage rate was 6.06% through Wednesday, down from 6.16% last week, according to Freddie Mac data. That’s the lowest level since September 2022, when mortgage rates initially broke 6% following a prolonged period of ultralow rates.
Read more: Best mortgage lenders of January 2026
The average 15-year mortgage rate, meanwhile, dropped to 5.38%, from 5.46%. Mortgage rates are influenced by factors including Treasury yields, the economic environment, and demand for mortgage-backed securities. President Trump’s announcement that he was “instructing my Representatives to BUY $200 BILLION DOLLARS IN MORTGAGE BONDS,” in a bid to lower mortgage rates, primarily influenced the third factor.
The Jan. 8 post almost immediately helped stoke demand for mortgage-backed securities. Prices on the bonds rose while yields fell, which in turn helped lower mortgage rates.
Read more: How Trump’s latest bond-buying plan could influence mortgage rates and affordability
Buyers and refinancers took notice of the sudden move lower. Mortgage applications for home purchases jumped 16% through Friday from a week earlier, and refinancing applications soared 40%, according to Mortgage Bankers Association data.
“With mortgage rates much lower than a year ago and edging closer to 6 percent, MBA expects strong interest from homeowners seeking a refinance and would-be buyers stepping off the sidelines,” MBA president and CEO Bob Broeksmit said in a statement.
Lower mortgage rates might help improve home sales this year, although affordability will remain a challenge for many buyers, Realtor.com senior economic research analyst Hannah Jones said in a statement.
“We expect mortgage rates to remain relatively steady in the low-6% range this year, which could support modestly improving home sales in 2026,” Jones said. “Even so, affordability constraints and the remaining stock of low-rate mortgages suggest any recovery in home sales is likely to be gradual rather than rapid.”
Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.
Sign up for the Mind Your Money newsletter
Read the latest financial and business news from Yahoo Finance