Mortgage rates hit 3-year low after Trump's bond-buying announcement

Core Insights - Mortgage rates have fallen to their lowest level in over three years, with the average 30-year mortgage rate at 6.06%, down from 6.16% last week, following President Trump's announcement for Fannie Mae and Freddie Mac to buy $200 billion in mortgage bonds [1][3] - The average 15-year mortgage rate decreased to 5.38% from 5.46%, influenced by the demand for mortgage-backed securities and Treasury yields [2][3] Group 1: Market Reaction - The announcement led to a significant increase in demand for mortgage-backed securities, resulting in rising bond prices and falling yields, which contributed to the lower mortgage rates [3] - Mortgage applications for home purchases surged by 16% and refinancing applications increased by 40% following the announcement, indicating a strong market response [3] Group 2: Future Expectations - The Mortgage Bankers Association (MBA) anticipates strong interest from homeowners seeking refinancing and potential buyers due to lower mortgage rates, although affordability remains a challenge [4] - Expectations are for mortgage rates to remain steady in the low-6% range throughout the year, which could support modest improvements in home sales, but any recovery is likely to be gradual due to affordability constraints [5]