The president`s latest affordability push sent 15- and 30-year mortgage rates tumbling. But experts say the long-term impact may be limited.

A home for sale in Surfside, Fla., on Jan. 7.Zak Bennett / Bloomberg via Getty Images

Mortgage rates on Friday fell below 6% for the first time in years, after President Donald Trump ordered his "representatives" to begin buying $200 billion worth of mortgage bonds, his latest push to lower costs for Americans grappling with the high cost of living.

The average interest rate for a 30-year fixed residential mortgage hit 5.99% on Friday morning, down from 6.21% on Thursday, according to data provider Mortgage News Daily. That`s the lowest the 30-year average rate has been since February 2023.

As of Friday, rates for the average 30-year mortgage have now fallen more than 1% in the past year.

Interest rates for a 15-year fixed rate mortgage also dropped significantly on Friday, falling to 5.55%.

Mortgage rates typically rise and fall very slowly, by just tenths or even hundredths of a percent per day. So the latest moves are well out of the ordinary.

The sharp drops came after Trump wrote on Truth Social Thursday that he was "instructing my Representatives to BUY $200 BILLION DOLLARS IN MORTGAGE BONDS."

"This will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable," Trump said in the post.

Federal Housing Finance Authority chief Bill Pulte later said in his own social media post that "Fannie [Mae] and Freddie [Mac] are the entities that will do the purchases."

Indeed, Trump`s announcement alone brought rates down immediately. Pulte told reporters at the White House on Friday that he had already begun to execute on Trump`s instructions. "We put in a $3 billion buy already," he said.

In recent months, Fannie Mae and Freddie Mac have bought tens of billions of dollars` worth of mortgage bonds. As of their most recent public filings, the two entities have combined holdings of mortgage securities worth more than $230 billion.

If Fannie and Freddie were to buy another $200 billion in bonds, it would nearly double their holdings.

Rates move down because Fannie and Freddie buy the bonds from lenders, which then have more money to lend to homebuyers. With an increase in the supply of money to lend and demand relatively steady, interest rates, the price of mortgages, tend to fall.

Trump`s announcement was the latest push by his administration to combat an affordability crisis gripping consumers at the start of an election year.

The administration has also rolled back some tariffs and fuel efficiency standards for passenger vehicles, moves aimed at lowering everyday costs for Americans.

Analysts at UBS on Friday wrote in a client note that they believe Trump`s bond buying plan could help push 30-year fixed mortgage rates down more than a fifth of a percent.

"This decline may provide a boost to both new construction demand and existing home turnover," the UBS analysts wrote.

But Trump`s bond buying plan may not be a silver bullet.

The average interest rate of U.S. residential mortgages currently outstanding is a steady 4.4% - well below the average rate for a new mortgage.

This means the impact of Trump`s plan on homeowners who are reluctant to sell their homes because they have low mortgage rates could be limited.

"Similar to our view on President Trump`s post regarding a ban on institutional investors buying homes, we do not believe this initiative will have any significant impact on the housing market," JPMorgan Chase homebuilding analysts said on Friday.

"$200 billion of mortgages accounts for only roughly 1.4% of the approximately $14.5 trillion mortgage market," they wrote.