New Trump Policies Could Lower Rates, Lead to More Homebuyers

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U.S. President Donald Trump launched a pair of policies meant to reduce housing costs in the midterm elections, including taking steps to prevent institutional investors from buying single-family homes and instructing Fannie Mae and Freddie Mac to purchase US$200 billion in mortgage bonds.

Trump asserted that locking institutional investors from the home market would help make housing more affordable for Americans, according to a report by Megan Cerullo for CBS News MoneyWatch on January 8. In a social media post, Trump expressed concern that the dream of homeownership is becoming increasingly unattainable for many Americans and emphasized the need for action to enable more people to achieve this milestone.

"I am immediately taking steps to ban large institutional investors from buying more single-family homes, and I will be calling on Congress to codify it," Trump wrote, according to Cerullo. "People live in homes, not corporations."

He also mentioned that he will provide further details about the proposal at the World Economic Forum in Davos, Switzerland, later this month. The White House has not offered additional information on Trump's plans to restrict large investors from acquiring homes.

Trump also announced the mortgage bonds decision on social media, stating, "This will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable," according to a report by Josh Wingrove, Scott Carpenter and Katy O'Donnell for Bloomberg on January 9.

Trump noted that his choice not to sell Fannie Mae and Freddie Mac during his first term allowed them to accumulate "US$200 BILLION DOLLARS IN CASH," which facilitated this announcement. "It is one of my many steps in restoring Affordability, something that the Biden Administration absolutely destroyed," the president added.

The announcement led to a rally in mortgage-backed securities relative to Treasuries, and mortgage-linked stocks such as Rocket Cos. Inc. and LoanDepot, Inc. saw gains, the report noted. Fannie Mae and Freddie Mac, which are government-sponsored enterprises bailed out during the 2008 financial crisis, have already been increasing their mortgage bond holdings. Recent figures show that their retained portfolios — bonds and loans they keep rather than sell to investors — grew by over 25% in the five months through October.

With approximately US$9 trillion in agency mortgage bonds outstanding, the proposed purchases would account for just over 2% of the market, the Bloomberg report said. However, the additional demand outlined by the president is expected to reduce spreads, leading to lower mortgage rates for U.S. households.

Demand for these bonds has been rising recently, pushing spreads on mortgage bonds to their tightest level since 2022. Some investors anticipate that banks will also increase their purchases of mortgage-backed securities, partly due to rising deposits providing them with more capital to invest, the report said.

"If the Trump administration allows Fannie and Freddie to grow their retained portfolios, there's no question it will have downward pressure on mortgage rates — probably at least a quarter of a point, maybe more," said David Dworkin, president and chief executive officer of the National Housing Conference, Bloomberg said.

Strong Rally in Bonds, Key Mortgage Rate Decreases

The bonds provide investors with a way to earn income by investing in other people's monthly mortgage payments, according to a January 12 report by Joy Wiltermuth for MarketWatch. However, due to government guarantees, investors are not liable if borrowers default or if there is another wave of foreclosures.

Optimism surrounding President Trump's directive, despite lacking specific details, has contributed to a strong rally in mortgage bonds recently, Wiltermuth noted. On Friday, this optimism helped bring the 30-year mortgage rate below the significant 6% threshold. "I thought we'd tighten by 5 to 15 basis points," said Harley Bassman, a mortgage veteran and managing partner at Simplify Asset Management, regarding Friday's market movement, according to the article. "We tightened by about 10 basis points."

When demand for mortgage bonds increases, it can trigger a rally and cause spreads to tighten, as investors accept a smaller spread — the additional compensation above a benchmark rate, in this case, the 10-year Treasury rate. However, for Trump's directive to effectively lower mortgage rates, other investors will need to continue buying rather than taking advantage of the stronger market to sell for profit.

Wiltermuth noted that Wall Street refers to this US$9 trillion bond market as "agency mortgage-backed securities."

This approach won't address the shortage of homes constructed over the past decade, a factor that has contributed to the U.S. housing affordability crisis, she wrote. "The risk is home prices go up as rates come down," said Scott Buchta, head of fixed-income strategy at Brean Capital, regarding Trump's plan. "Then it doesn't help with affordability."

A 'Very Big Opportunity' For the Housing Market

Federal Housing Finance Director Bill Pulte stated in an interview that Fannie Mae and Freddie Mac will implement the president's directive by purchasing US$200 billion in mortgage-backed securities from the public market, reported Cassandra Dumay for Politico on January 8.

These securities consist of home loans that government-controlled entities like Fannie and Freddie, along with private financial institutions, buy and package into bonds for investors to trade. Pulte mentioned that the administration anticipates this move will make loans more affordable for homebuyers.

"What will happen is, as mortgage bond prices go up, interest rates theoretically go down," Pulte explained. "It's a very, very big opportunity for the housing market and for all Americans aspiring to get that American dream."

The decision aligns with requests from small lender industry groups, such as Community Home Lenders of America and Independent Community Bankers of America, Dumay reported. In an October letter to Pulte and Treasury Secretary Scott Bessent, these organizations urged Fannie and Freddie to significantly increase their mortgage bond purchases to make home loans more accessible and affordable.

While other industry analysts agree that the large purchase should lower mortgage rates, they argue it's not the most effective method, the Politico piece said. Michael Bright, CEO of the Structured Finance Association, commented that a US$200 billion purchase might "lower rates by a little bit," but it also exposes Fannie and Freddie to significant risks if the market shifts. "It exposes them to the exact same risks that got them blown up" in 2008, Bright noted.

This action seems aimed at achieving a similar outcome to the Federal Reserve's purchases of mortgage-backed securities, which it undertakes during economic downturns to drive down longer-term rates like mortgages, Dumay said. This process is known as "quantitative easing" or QE.

However, the move does throw "some wrinkles in the equation" for the economy, said Bloomberg's Erica Adelburg on January 9 on a Bloomberg podcast on YouTube.

"For instance, now, if higher demand for homes without more supply means that home prices go up, that could boost inflation," Adelburg said. "So, there could be a lot of offsetting factors, both from affordability as well as mortgage rates."

But she said that the impact of the move "has been fairly substantial so far. It's not just about them buying. It's also that volatility has come down."

Mortgage rates have dropped to their lowest point in over three years this week following President Trump's announcement that Fannie Mae and Freddie Mac would purchase US$200 billion in mortgage bonds, according to a report by Claire Boston for Yahoo! Finance on January 15. According to Freddie Mac data, the average 30-year mortgage rate fell to 6.06% through Wednesday, down from 6.16% the previous week. This marks the lowest level since September 2022, when mortgage rates first surpassed 6% after a long period of very low rates. Meanwhile, the average 15-year mortgage rate decreased to 5.38% from 5.46%.

This sudden decrease in rates caught the attention of buyers and refinancers. Mortgage applications for home purchases increased by 16% through Friday compared to the previous week, and refinancing applications surged by 40%, according to data from the Mortgage Bankers Association. "With mortgage rates much lower than a year ago and edging closer to 6%, MBA expects strong interest from homeowners seeking a refinance and would-be buyers stepping off the sidelines," said MBA president and CEO Bob Broeksmit in a statement, according to Boston's report.

Loan originators and brokerages, including those below could see benefits from the lower rates a spike in homebuyers.

Rocket Companies Inc.

Rocket Companies Inc. (RKT:NYSE), a fintech platform focused on mortgages and real estate, ended the session Friday at US$23.29, marking a 9.65% increase, according to Jeff Santoro of The Motley Fool on January 9. "Since its IPO in 2020, the company has grown by 8%. Trading volume reached 69.9 million shares, which is about 111% higher than its three-month average of 33.4 million shares." 

Friday's trading saw housing-sensitive stocks respond to President Donald Trump's mortgage-bond purchase plan, with investors closely monitoring how lower borrowing costs might impact mortgage originations.

Rocket Companies — which includes loan origination subsidiary Rocket Mortgage —reached a new 52-week high following Trump's proposal, according to Santor. The influx of investors into the stock suggests that the move could ease the tight housing market and potentially lead to lower mortgage rates.

The stock movement was also influenced by options trading, with call contracts experiencing volume 53% above normal. Earlier that week, Barclays set a US$22 price target with an equal weight rating for the company, while Jefferies reiterated its buy rating with a US$25 target. These data points help explain some of the price movements but aren't necessarily intended as actionable advice for individual investors.

Financial data indicates that the company is navigating challenges with a revenue of approximately US$4.93 billion, according to a report by Timothy Sykes on TimothySykes.com on January 9. However, it has experienced a significant decline in revenue growth over recent years, with a 27.44% decrease over three years. The company continues to operate at a loss, as evidenced by a negative free cash flow of -US$82.4 million in recent quarters. On a positive note, Rocket has managed its capital effectively, maintaining a leverage ratio of 3.8, which reflects a cautious approach to borrowing. Although there are concerns about its long-term debt, recent earnings reports suggest a coherent plan to improve profitability.

Redfin, a brokerage closely associated with Rocket Companies, highlights ongoing interest in high-end real estate. Their reports point to a surge in luxury home sales in Aspen, Colorado, and indicate strong activity in Florida and California's upscale markets, Sykes wrote. This trend suggests a potential increase in financial products Rocket can offer to affluent buyers entering these areas. With ongoing discussions about affordable housing and purchase finance, along with anticipated easier mortgage conditions, Rocket Companies seems poised to benefit from broader economic changes, he said.

An expected improvement in the credit landscape in 2026 may further expand Rocket's client base, enhancing its bottom line.

"The latest updates from policymakers have sent ripples through firms with exposure to the mortgage industry," Sykes said. "President Trump's potential constraints on big investors buying single-family homes have been met with mixed reactions. While it spells uncertainty for some sectors, mortgage originators like Rocket could see positive shifts."

Additionally, with directives to accumulate mortgage bonds, the market could anticipate elongated periods of lower rates, easing buying pressure for many, he said.

"This proposal, focusing on expanding market accessibility, will likely leave Rocket Companies and its peers in a beneficial posture moving forward," Sykes noted.

Last fall, Rocket Companies announced the completion of its acquisition of Mr. Cooper Group, uniting the nation's largest home loan originator with the largest mortgage servicer. Together, the companies will manage a combined servicing portfolio of nearly 10 million homeowners.

"Homeownership is the bedrock of the American Dream. By combining mortgage servicing and loan origination, along with home search through Redfin, we are paving the path for Americans to own the dream," said Rocket Companies Chief Executive Officer and Director Varun Krishna, according to the company's release. "Jay Bray and his team have built a technology-driven platform that is the backbone of Mr. Cooper, helping it scale to become the largest servicer in the country. By integrating Mr. Cooper's servicing strength with Rocket's origination capabilities and AI technology and establishing a strong national brand, our goal is to lower costs and make the process easier."

After 25 years of leading the growth and culture of Mr. Cooper, Jay Bray, the current CEO of Mr. Cooper, will join Rocket as the new President and CEO of Rocket Mortgage, reporting to Varun Krishna, CEO of Rocket Companies, the parent company of Rocket Mortgage. Bray will also join Rocket's board of directors.

As part of the acquisition, Mr. Cooper and all of its servicing functions will be rebranded under the Rocket umbrella. Mr. Cooper's servicing scale and expertise are complemented by Rocket's long track record of client satisfaction, recognized by J.D. Power, Rocket said.

Rocket also said it recently closed its acquisition of Redfin last July. Together with Mr. Cooper, Rocket's capabilities span the entirety of homeownership – home search, financing, title, closing, and servicing. These acquisitions allow Rocket to build on its US$500 million investment in data and AI technology and further its mission to Help Everyone Home.

¹Just over 1% of the company is owned by insiders and management, and about 41% by institutions. The rest is retail.

Major shareholders include ValueAct Capital Management with 4.29%, Teachers Advisors LLC with 3.19%, Nuveen LLC with 3.18%, The Vanguard Group Inc. with 2.37%, and Fidelity Management and Research Co. with 1.52%.

Its market cap is US$64.09 billion with 2.8 billion shares outstanding. It trades in a 52-week range of US$9.85 and US$23.50.

Beeline Holdings Inc.

Beeline Holdings Inc. (BLNE:NASDAQ), a digital mortgage lender offering both conventional and alternative mortgage solutions for borrowers who don't meet traditional underwriting criteria, as well as home equity products using blockchain technology, applauded Trump's announcement that Freddie Mac and Fannie Mae would buy the mortgage-backed securities to help lower mortgage rates in a release on January 12.

The company's management said it supports actions that aim to reduce mortgage rates, improve affordability, and boost consumer engagement in both purchase and refinance markets. The company believes it is well-positioned to benefit from these changes and anticipates that borrowers, particularly first-time homebuyers, will have access to a wider array of financing options if rates decrease.

"The mortgage industry is long overdue for interest rate relief that can meaningfully improve affordability for the American homeowner," said Beeline CEO Nick Liuzza. "Measures designed to support the mortgage market could have a direct impact on the rates homebuyers pay. If rates move lower, we would expect increased consumer interest and a wider range of options."

Liuzza said the company was already forecasting strong growth in 2026. "Beeline enters 2026 with a debt-free balance sheet, has increased revenues by more than 100% compared to fiscal year 2024, despite a subdued housing market, and we believe we are well-positioned to benefit through our lending, title, and home equity investment offerings," he continued. "We were already expecting to double our revenue in 2026 compared to 2025 in our lending and title divisions, and now expect additional revenue tied to our BeelineEquity product."

Beeline utilizes proprietary AI developed over the past six years, along with new products built on blockchain technology, to create better outcomes for consumers.

²Analyst John Newell reviewed Beeline Holdings for Streetwise Reports, noting that while many financial firms are struggling in today's high-rate environment, Beeline Holdings is taking a different path.

"CEO Nick Liuzza and his team continue to execute on a founder-led vision that blends fintech expertise with disruptive mortgage innovation," Newell wrote.

The company is proving that fintech innovation, AI adoption, and disciplined financial management can change the trajectory of a small-cap stock, he said.

"With debt eliminated, AI-driven lead generation expanding, and a proprietary equity release product about to scale, the company has multiple catalysts lining up."

The analyst rated the stock a Speculative Buy, especially on any minor pullbacks.

Ladenburg Thalmann anticipates Beeline will achieve positive adjusted EBITDA in the first quarter of 2026 and significant profitability for the fiscal year 2025, Analyst Glenn Mattson said in an updated research note on August 19. He maintained a Buy rating on the stock with a US$4.50 per share price target, representing more than an 85% increase from the share price on January 14.

According to Beeline, the company utilizes AI, automation, and a modern user interface to provide a faster, simpler, and more transparent way to obtain a home loan. Customers can get approved and view precise loan options that can be locked in during a single online session. The online tracker allows them to securely upload all necessary documents and receive updates throughout the process.

In addition to conventional mortgages, Beeline offers non-agency (non-QM) mortgages, enabling applicants to qualify without traditional employment and income documentation like W-2s and tax returns. These loans are designed for borrowers with nontraditional income sources, such as self-employed individuals, freelancers, and retirees, who are integral to today's gig economy. The company's title agency provides services to Beeline, other lenders, and asset managers, resulting in improved outcomes for Beeline loan borrowers and investors.

Beeline is leveraging its combination of AI and task-based processing to lead to reduced selling and operating costs. "Beeline is positioned for strong growth driven by unmatched product differentiation, diversification, and disruption," Liuzza has said. "We plan to replicate this formula moving forward."

¹Eight strategic entities own about 19% of Beeline. Twenty-nine institutions have about 9%. Retail investors hold the rest. The top shareholder is the CEO Liuzza with 16%.

The company has 28 million outstanding shares, and its market cap is US$63 million. Its 52-week range is US$0.62–US$10.50 per share.

Frank Fintech Inc.

As a privately held Canadian mortgage brokerage based in Toronto, Frank Fintech Inc. will not likely be directly affected by Trump's plan, as mortgages are different animals in the two countries, according to BMO. In the U.S., the mortgage term typically matches the length of the amortization period, meaning that by the end of the term, the mortgage is fully paid off. In Canada, mortgages also have an amortization period, which determines the total duration of the mortgage, but they usually consist of several shorter terms within that period. These mortgage terms in Canada set the interest rate and conditions for a specific period and are renegotiated throughout the amortization period, BMO said.

But Canada is contemplating its own changes to seek its supply of affordable housing. It is considering adjustments to its ban on foreign home buyers starting in 2027, according to its Housing Minister Greg Roberston, as reported by Laura Dhillon Kane for Bloomberg on December 22, 2025.

Despite efforts, homes remain unaffordable for many Canadians in cities like Toronto and Vancouver, Kane reported. The six-month trend in housing starts reveals slowing momentum, and although starts are still higher than last year, this increase is largely due to rental construction supported by government initiatives.

Under Australia's current regulations, which are set to expire in April 2027, foreigners are generally prohibited from purchasing existing homes but can buy new units and vacant land for construction. Recent data indicate an upward trend in housing starts in Australia, although the government has struggled to meet its homebuilding targets. Data from 2020 suggests that foreigners owned no more than 5% of properties in any major Canadian market.

Robertson stated that the government will uphold the previous administration's decision to extend the ban on foreign buyers through 2026. However, over the next year, it will examine successful strategies in similar countries, particularly Australia.

"We need to figure out the best role for offshore capital to play in the housing market," the former Vancouver mayor said in an interview with Bloomberg. Robertson, who has managed the housing portfolio since joining Prime Minister Mark Carney's cabinet shortly after the April election, emphasized the importance of prioritizing housing for Canadians.

"We need to make sure housing is built and owned for Canadians first," he said. "That said, we've seen more innovation on this in countries like Australia that enable some foreign investment into higher-end new homes, or in some cases rental housing."

Frank Mortgage offers a user-friendly, transparent digital platform that allows consumers to research, explore, and apply for mortgages online, as stated on its website. Additionally, mortgage brokers are available to assist with home purchases, refinancing, and mortgage switches. Since 2021, this fee-free company has been helping Canadians secure competitive mortgage rates quickly and efficiently.

"With the digital natives that are the homebuyers of today and tomorrow, digital-first solutions are in demand," said Founder and Chief Executive Officer Don Scott. "Delivering what these customers want will win the day, and they want first-class service, as all customers do, but they also are demanding transparency and product choice that can only be delivered in an unbiased digital environment."

Last year, Frank Mortgage partnered with Hyyve Inc. to provide homeowners and sellers on the Canadian real estate platform, Hyvve.ca, with a seamless, all-in-one experience. Frank Mortgage's solutions were integrated into Hyyve's home services marketplace, enabling homeowners to connect with top real estate agents, secure financing, and access essential services well before listing their homes. This partnership benefits Frank Mortgage by granting early access to homeowners, allowing them to offer presale mortgage consultations, approvals, and financial planning before they enter the market.

"This early engagement allows us to offer tailored mortgage solutions far ahead of the traditional real estate timeline, empowering sellers to transition seamlessly into buyers," said Hyyve CEO Patrick Armstrong.

Scott has stated that his company aims to make mortgages — and access to various rates — more attainable for Canadian homebuyers. This involves simplifying the mortgage acquisition process, which is especially important in the current political and economic climate.

Frank Mortgage's target audience includes new homebuyers, Gen Zers, millennials, and even some late Gen Xers who are first-time buyers. However, because they don't offer 30-year mortgages, "renewal business is huge," as well.

"The good news for those getting ready to renew their mortgage is that there will be competition among banks and lenders to retain and attract customers, which could lead to better deals for consumers," Victor Tran, a Toronto-based mortgage broker, told Yahoo! Finance.