Can Fannie Mae and Freddie Mac Really Push Mortgage Rates Below 6%
Two major banking groups say lowering mortgage rates could be as easy as flipping a policy switch. Tim Lucas and Craig Berry unpack a bold proposal that could nudge rates under 6%, how it works, and why it’s sparking debate in Washington.
In this episode you’ll learn:
- The proposal: Fannie Mae and Freddie Mac would buy $300 billion in mortgage-backed securities when rates exceed 1.7% above 10-year Treasuries.
- The potential payoff: Could drop the average 30-year fixed rate from 6.19% → 5.89%, saving homeowners hundreds per month.
- The catch: More risk on Fannie and Freddie’s books—the same issue that led to their 2008 conservatorship.
- Why now: The Fed stopped buying MBS in 2022, leaving a gap in the market that’s kept rates elevated.
- The big question: Should the government step in to lower rates—or let the market correct itself naturally?
