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Will $200B in GSE buying help lower mortgage costs?

January 28, 2026

“There is plenty of show, but not a lot of dough,” notes Jack Janasiewicz, Portfolio Manager and Lead Portfolio Strategist, Natixis Investment Managers Solutions, highlighting the limits of what the Executive branch can do without Congress. In an effort to make progress on affordability issues, President Trump has directed the government sponsored enterprises (GSE) Fannie Mae and Freddie Mac to purchase $200B in mortgage backed securities (MBS) to help bring mortgage rates lower. The GSEs support the market by buying mortgages, bundling them into securities, and freeing up lender balance sheets for additional credit creation. The White House’s GSE-led purchase plan is $100B more than what was already expected by market participants for 2026, and only a drop in the bucket of the $9T agency MBS market. According to Jack, it could trigger a modest, short-term reduction in mortgage rates, on the order of in 10–25 basis points (a tenth to two-and-a-half tenths of a percentage point). 

 

Mortgage spread decomposition (12/31/14–1/16/25)
U-3 unemployment rate (1/31/23–12/31/25) Source: Bloomberg
  • Mortgage spreads can shift based on demand and lender capacity, a dynamic that became clear during COVID when a surge in buyers caused spreads to widen.
  • Lower secondary spreads can translate into lower mortgage rates, and increased MBS buying by the GSEs can help compress that spread. 
  • The $200B in potential GSE purchases stems from their ability to expand retained portfolios under their agreement with the US Treasury. 

This material is provided for informational purposes only and should not be construed as investment advice. The views and opinions contained herein reflect the subjective judgments and assumptions of the authors only and do not necessarily reflect the views of Natixis Investment Managers, or any of its affiliates. The views and opinions expressed may change based on market and other conditions. There can be no assurance that developments will transpire as forecasted, and actual results may vary.

All investing involves risk, including the risk of loss. Investment risk exists with equity, fixed income, and alternative investments. There is no assurance that any investment will meet its performance objectives or that losses will be avoided. Investors should fully understand the risks associated with any investment prior to investing.

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