Housing Market: Limited Impact from Policy

The U.S. housing and mortgage markets are adjusting to the Trump administration's announcement of a $200 billion mortgage purchase program by Fannie Mae and Freddie Mac. This initiative, which represents an incremental $100 billion over previous expectations, aims to offset the Federal Reserve's balance sheet runoff and improve affordability. While the announcement triggered an immediate 15 basis point tightening in mortgage spreads and pushed headline rates below 6% for the first time since 2022, the long-term impact on housing volume remains modest. Projections suggest existing home sales may only rise from 4.23 million to roughly 4.3 million units, as increased demand will likely be met by a corresponding rise in listings, keeping home price growth steady at 2%. Beyond direct purchases, potential policy shifts such as lowering guarantee fees or exploring mortgage portability could further influence market dynamics, providing additional tailwinds for securitized credit and non-QM mortgage sectors.