Mortgage Rates 📢 January 12th, 2026

INTEREST RATES

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Rates Update: Why the $200B MBS Move Matters

Last Thursday, the 8th, Donald Trump said he is instructing Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities (MBS).

Here is what that actually means for mortgage rates, in plain terms.

What happens when $200B goes into MBS

• 📉 More buyers of mortgage bonds
  When Fannie and Freddie buy MBS, demand goes up. Higher demand pushes MBS prices higher.

• 📉 Higher MBS prices = lower mortgage rates
  Mortgage rates move opposite MBS prices. As MBS prices rise, lenders can offer lower rates.

• 📉 Mortgage spreads tighten
  This helps reduce the gap between Treasury yields and mortgage rates, which has been unusually wide.

Why this is a big number

• 💰 $200B is meaningful
  Prior QE programs buying roughly $40B per month had a noticeable impact on rates.
  Even if this averages closer to $20B per month, it is still supportive for mortgage pricing.

• 🏦 This targets mortgages directly
  This is not about long-term Treasuries. It specifically supports housing and mortgage rates.

What we saw in the market so far

• 📊 MBS prices jumped immediately after the announcement

• 📊 Gains were partially tempered by the BLS Jobs Report

• 📊 Net result: mortgage bonds remain about 40 bps better than before the announcement

What this means for buyers and sellers

• 🏠 Rates have room to move lower

• 🔁 More refinance opportunities ahead if this continues

• 📈 Lower rates support demand and home values

Realtor Insight:
This creates a window where buyers can get in at today’s prices, benefit from potential appreciation, and still have a refinance opportunity later if rates continue to ease.

⚠️ CAUTION AHEAD: If this trend in rates continues and accelerates, it could lead to a price ramp-up as buyers stretch their newly gained buying power.