Mortgage Rates Dip Below 6% as Bond-Buying Push Gains Traction

Hadisur Rahman, JadeTimes Staff

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Image Source: Zak Bennett / Bloomberg via Getty Images

Mortgage rates fell below 6% for the first time in years, propelled by a presidential directive to mobilize government-backed bond purchases aimed at easing housing costs for Americans. The average 30-year fixed mortgage slid to 5.99% on Friday, down from 6.21% a day earlier, marking the lowest level since February 2023. The 15-year fixed also dropped to 5.55%.

Analysts say the move is notable but its long-term impact remains uncertain. The initiative, which envisions increased liquidity in the lending market, could enable lenders to offer more favorable terms to borrowers. Yet experts caution that benefits depend on the extent of adoption and how policy evolves in the coming weeks and months.

Administration officials described the bond-buying push as a targeted step to address affordability concerns amid a challenging housing market. While some lenders and market watchers welcomed the development, others noted that many current homeowners with lower-rate mortgages are largely insulated from the immediate effects, tempering expectations for a broad, rapid shift in housing activity.

UBS researchers suggested the policy could stimulate both new construction and existing-home turnover if sustained, though they warned that a $200 billion bond purchase would constitute only a small fraction of the roughly $14.5 trillion mortgage market. JPMorgan Chase analysts echoed the caution, arguing that the impact on homeowners reluctant to sell might be limited.

Rates have historically moved in response to broader economic signals rather than any single administrative action. As data flow in, economists will assess whether the latest policy effort translates into meaningful reductions in borrowing costs for prospective homebuyers.