Housing-linked stocks rally on Trump’s US$200 billion mortgage bond-buy order
Investors have been closely watching policy moves, market shifts or interest rates for signs of a housing-market recovery
[NEW YORK] US mortgage lenders and housing stocks rose on Friday (Jan 9), a day after US President Donald Trump said he is ordering his representatives to buy US$200 billion in mortgage bonds to bring down housing costs.
US housing affordability has been under a persistent strain, with high mortgage rates and elevated home prices keeping many buyers on the sidelines.
Policymakers have faced growing pressure to find ways to lower borrowing costs and revive housing activity after years of subdued demand and sluggish loan growth.
Trump said in a post on social media platform Truth Social the purchase was aimed at bringing down mortgage rates and monthly payments to make housing affordable.
“I am giving special attention to the housing market,” he added.
US Federal Housing Finance Agency director Bill Pulte said on X later on Thursday US government-controlled mortgage finance giants Fannie Mae and Freddie Mac will execute the purchase.
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Consumer lender loanDepot surged 16 per cent, while Rocket Companies gained 6 per cent. UWM Holdings was last up 8 per cent and Opendoor Technologies rose 12 per cent.
Homebuilders Lennar and DR Horton added 4.7 per cent and 4.4 per cent, respectively.
“Every little bit will help push mortgage yields lower, but this might be self-defeating in terms of housing affordability. It might get a few people off the fence about listing their homes, but it will also increase demand for housing,” Brian Jacobsen, chief economic strategist at Annex Wealth Management told Reuters.
Earlier this week, Trump also said his administration is moving to ban Wall Street firms from buying up single-family homes in a bid to reduce home prices.
Investors have been closely watching policy moves, market shifts or interest rates that could alter the outlook for mortgage volume and earnings after a prolonged slowdown in the housing market.
“The biggest problem with housing is supply, not demand, and the way to fix supply is at the local level with zoning and regulations, not at the federal level,” Jacobsen said. REUTERS
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