## The US Mortgage Market Experiences Historic Drop in Interest Rates Below 6%

On Friday morning, a significant movement occurred in the US real estate market — mortgage interest rates fell below the 6% barrier for the first time in many years. This event drew attention from both market analysts and property owners, who observed the evolution of borrowing capital prices.

### What were the specific changes in the market?

The average rate for a 30-year mortgage decreased significantly over the past twelve months — by more than one percentage point. At the same time, conditions for 15-year loans also improved, with the current rate at 5.55%. Such a pace of change in the mortgage sector is extraordinary — usually, changes occur gradually, causing fluctuations of fractions of a percent daily. The sharpness of recent reductions indicates extraordinary market conditions.

### What caused the sudden change in US rates?

A breakthrough moment occurred following the announcement of a plan to purchase mortgage-backed bonds. The administration announced its intention to acquire securities worth a total of 200 billion dollars, aiming to strengthen the availability of home loans for Americans. Bill Pulte from the Federal Housing Finance Authority revealed to the media that the implementation of the program has already begun — in the first phase, bonds worth 3 billion dollars were purchased.

Fannie Mae and Freddie Mac, key government-supported institutions in the mortgage market, have been tasked with executing these purchases. These institutions already hold a portfolio of mortgage bonds exceeding 230 billion dollars. The proposed additional investments would nearly double their current involvement.

### How does the purchase mechanism influence interest rates?

When institutions like Fannie Mae and Freddie Mac buy mortgage bonds from credit intermediaries, they release capital that allows for the issuance of new loans. This additional liquidity, combined with sustained demand in the market, naturally reduces financing costs for borrowers. The increased availability of funds results in competition among lenders and a reduction in margins, which translates into lower US interest rates for property buyers.

### What were the experts' predictions?

UBS analysts indicated in their report that the strategy could potentially lower 30-year mortgage rates by over 0.2 percentage points. Such a reduction could stimulate both new construction investments and the turnover of existing properties, opening new opportunities for market participants.

However, other analytical firms expressed skepticism. JPMorgan Chase experts noted that the $200 billion amount represents only about 1.4% of the entire estimated US mortgage market, which amounts to 14.5 trillion dollars. They also emphasized that the average interest rate on existing loans is 4.4% — well below current rates for new agreements — which could limit homeowners' willingness to sell their homes and ultimately reduce the program's impact scale.

### Broader Cost of Living Strategy

The mortgage bond initiative aligns with a broader tactic aimed at easing pressure on household budgets. Concurrent measures include tariff adjustments and changes to fuel efficiency regulations — all intended to reduce current consumer expenses. This multi-faceted approach indicates a priority to improve property accessibility and stabilize living costs for citizens.