Mortgage rates have dropped below 6% following a federal housing announcement, marking their lowest level in nearly three years. Bill Pulte, Director of the Federal Housing Finance Agency, attributes this shift to a strategic $200 billion capital injection into mortgage-backed securities by Fannie Mae and Freddie Mac. This policy aims to restore housing affordability by leveraging the agencies' significant cash reserves to lower borrowing costs for the American public. While some market observers question if using these agencies for policy goals conflicts with plans to take them public, the strategy treats the entities as businesses that benefit from high-yielding securities backed by post-recession underwriting standards. Future initiatives to further stabilize the market include a potential ban on institutional investors purchasing single-family homes and upcoming housing proposals expected to be unveiled at Davos.
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