Mortgage Rates Drop Under Trump, Institutional Investors Face Crackdown
Mortgage rates in the U.S. have reached their lowest levels in years, thanks to initiatives rolled out by President Donald Trump’s administration. This sharp decline aims to boost homeownership while limiting the influence of Wall Street in the housing market.
Housing and Urban Development Secretary Scott Turner provided details this week on initiatives that have effectively lowered borrowing costs. He highlighted the drop in the 30-year fixed mortgage rate, along with broad support from the Federal Housing Administration (FHA). “The 30-year fixed mortgage rate dipped to multi-year lows,” Turner announced, noting its role in “driving monthly payments down for two years at the lowest levels.” This reduced cost has allowed more families to afford homes, realizing what Turner described as the “American dream.”
According to Freddie Mac, the average 30-year mortgage rate fell to 5.99% in early January 2026, a decline from 6.21% in December. This change followed a key directive from Trump’s administration, which ordered Fannie Mae and Freddie Mac to acquire $200 billion in mortgage-backed securities. At least $3 billion of that target was executed by mid-January, as confirmed by Federal Housing Finance Agency Director Bill Pulte.
Trump, speaking at the World Economic Forum in Davos on January 21, emphasized the administration’s commitment to families over financial institutions. “Homes are built for people, not for corporations,” he asserted. This focus is reflected in the strategic bond purchases, which have driven down interest rates and reduced monthly housing payments for millions. For instance, a $350,000 home at the previous rate of 6.21% would cost around $2,145 a month. With the rate now at 5.99%, that amount decreases by nearly $50, translating to a savings of about $600 annually for homeowners.
These lower rates come amidst ongoing efforts to curb what the Trump administration calls institutional overreach in the housing market. An executive order signed on January 20, 2024, directs federal housing agencies—including HUD, USDA, VA, and Treasury—to impose restrictions on large institutional investors buying single-family homes. The administration argues that these entities hoard housing inventory, preventing families from securing homes.
During congressional hearings on January 21-22, lawmakers revealed that firms such as Invitation Homes and Pretium have acquired as much as 10% of homes sold in certain counties, outbidding first-time buyers and veterans alike. “At HUD last year, we helped support over one million people through FHA to be able to buy a home,” Secretary Turner said. “Half a million of those were first-time homebuyers.” He warned that such demand could dwindle if individual buyers continued facing competition from Wall Street-backed firms. “That’s why we are making bold action to ban institutional investors from buying single-family homes,” he emphasized.
The new ban specifically targets large corporate buyers, halting their access to federally supported financing for future purchases. While properties already owned won’t require divestment, the rule will apply to new acquisitions via federal housing programs. Further guidance from the Treasury is expected within 30 days, detailing who qualifies as a “large institutional investor.”
Additionally, the administration is advocating for “first-look” policies, which prioritize individual buyers in purchasing homes before institutional investors can enter the market. This measure aims to further enhance opportunities for families looking to buy their first homes.
Areas such as Dallas-Fort Worth are experiencing the effects of these changes, with buyers seeing a significant increase in available listings and better affordability conditions. Research indicates nearly 30,000 active listings in the region, providing buyers with improved options. Analysis from John Burns Research suggests that inventory has consistently grown since late 2025, and median days-on-market are increasing, giving buyers more time to make informed decisions.
Some real estate agents in high-demand regions report that reduced investor activity is easing market pressure. Buyers might save between $20,000 and $40,000 on their home purchase, benefiting from both falling rates and a wider selection of properties.
However, analysts caution that clarity is needed regarding the extent of the investor ban. Mega firms will undoubtedly be affected, but smaller investors with fewer properties may fall outside the provisions. Statistics reveal that less than 1% of buyer activity in late 2023 derived from major institutional investors, though their substantial influence in specific neighborhoods has exacerbated rising prices and rents.
Industry views on the ban are divided. Edward Pinto of the American Enterprise Institute testified that restrictive zoning and permitting practices present bigger challenges than institutional investors. “Local governments need to eliminate the immovable object of land-use regulation,” he stated.
Conversely, the National Association of Home Builders points to federal red tape exacerbating costs. Chairman Buddy Hughes highlighted that government regulation contributes to 24% of a newly constructed home’s cost, making housing less accessible even before construction begins.
On a brighter note, mortgage application volumes are on the rise after several months of stagnation. The Mortgage Bankers Association reported a 7% increase in applications for the week ending January 19, driven chiefly by FHA-backed loans, which cater to first-time and lower-income buyers.
Looking ahead, Turner reassured that more changes are on the horizon. HUD is working closely with the Government-Sponsored Enterprises (GSEs) and the Treasury Department to ensure that the $200 billion mortgage bond purchasing initiative remains effective until affordability metrics improve. “This is not a temporary adjustment,” Turner asserted. “We’re driving long-term affordability.”
Overall, the coordinated efforts to lower mortgage rates through market intervention and to restore access for individual buyers by limiting institutional competition have altered the housing landscape for 2026. The sustainability of these gains will hinge on cooperation from housing agencies, congressional support for the investor ban, and evolving market conditions as demand rises in the coming months.
“Millions of people in our country are now beginning to buy homes,” Turner concluded with optimism. “That’s good news.”
"*" indicates required fields
