You may have heard recent news about the Administration announcing a plan that could help mortgage rates improve—let’s dive into it.

Since the announcement, we’ve seen some brief positive movement in rates.

While this isn’t the same situation we saw a few years ago, it is still good news for buyers and homeowners.

Why This Matters for Mortgage Rates

The government plans to start buying mortgage-backed securities, which directly support the mortgage market. When this happens, it can help mortgage rates move lower over time.

This is different from what happened after COVID, when the government was buying much larger amounts and also purchasing U.S. Treasury bonds.

That earlier program pushed rates down very quickly and to historic lows.

This time around, the plan is much smaller — but could help stabilize rates a bit lower than they currently are.

Mortgage rates don’t move based on one single factor…

What We’re Seeing So Far

Rates reacted quickly this past Thursday after the announcement, but have whipsawed almost back to their pre-announcement market price; however, actual buying hasn’t started yet.

As the program begins and continues, I expect it to create a more favorable environment for mortgage rates — though not without some ups and downs along the way.

How Low Could Rates Go?

There’s been some talk online about mortgage rates falling back to 4%…

While that sounds great, it’s very unlikely unless something significant and unexpected happens in the economy.

A more realistic outlook:

• Rates around 5.75% seem achievable as long as other economic factors cooperate.
• Rates near 5.5% will be a stretch, even with the favorable news that FNMA is purchasing $200B in Mortgage-Backed Securities over the next 10 months.

The Bottom Line

This new program will not enable the ultra-low rates of the past, but it does give mortgage rates some momentum to support lower mortgage rates over the next 10 months or at least help stabilize them.

This is good news for buyers planning a purchase and homeowners considering a refinance to help ease the built-up financial pressures they are experiencing at home. Your Home Equity can be a very valuable asset when you examine the big picture of your finances with the proper analysis!

The Key Takeaway:

You don’t need perfect rates to make a smart move — but staying informed and prepared can make a big difference when opportunities appear. Do not be Reactive, because you will miss opportunities.

If you’re thinking about buying, refinancing, or just want to understand what today’s market means for you, talking through your options now can help you be ready when the timing is right.