The U.S. housing market is entering a new turning point. This is because the Trump administration announced the launch of a $200 billion mortgage-backed securities purchase program, which is expected to lower interest rates and improve homebuying power.

## Overall Policy Framework: A Large-Scale $200 Billion Initiative

The mortgage rate reduction plan recently unveiled by President Trump is an extremely unusual measure in which the federal government directly intervenes in the financial markets. According to officials from the Federal Housing Finance Agency, two government-sponsored enterprises, Fannie Mae and Freddie Mac, will lead the effort to purchase a total of $200 billion in mortgage-related assets. Notably, no new authorization from Congress is required, and the program can be carried out within existing authority.

## The Seriousness of the Underlying Housing Crisis

The environment for home purchasing in the United States remains extremely challenging. The 30-year fixed mortgage rate is currently stuck at 6.16%, placing a heavy burden on household finances through monthly repayments. Despite the Federal Reserve having already implemented multiple rate cuts (a total of 75 basis points), actual mortgage interest rates have not decreased significantly, and citizens’ homebuying power remains under pressure.

With inflationary pressures remaining high and living costs continuing to rise, the economic burden related to housing has become a top political and economic issue.

## Repeating the 2008 Crisis? The Unusual Nature of the Policy

Interestingly, this initiative resembles the quantitative easing (QE) policies implemented by the Federal Reserve after the 2008 financial crisis. Back then, large-scale purchases of MBS (mortgage-backed securities) were carried out to stabilize the financial system. Now, however, there is a stronger emphasis on using this as a political measure to appeal to voters.

Among policymakers and market observers, some refer to this as “personal quantitative easing,” clearly indicating that it is a direct intervention into the financial and housing markets through government authority.

## Impact on Markets and the Economy

How much this policy will influence U.S. mortgage rates is a key factor that will shape future market trends. Financial market participants are closely watching whether the massive inflow of $200 billion will alter the supply-demand balance in the mortgage market and whether it will lead to a tangible reduction in interest rates.

The increasing political pressure in the areas of finance and housing policy also signals to the global financial markets as a whole. If government intervention in the markets becomes normalized, it could call into question the very framework of traditional monetary policy.