Investment Impact Analysis of Trump's $200 Billion MBS Purchase Program

Based on the data and analysis I have collected, I now present a complete investment impact report for you.

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U.S. President-elect Trump recently announced that he has instructed his representatives to purchase $200 billion in mortgage-backed securities (MBS), a key economic policy signal released ahead of the start of his second term [1]. This policy directly addresses the core challenge facing the current U.S. housing market—high mortgage rates are suppressing homebuying demand and market liquidity.

The current average U.S. 30-year fixed mortgage rate is approximately 6.37%. Although it has retreated from its 2024 peak, it remains at a historically high level [2]. Against this backdrop, the Trump administration aims to achieve the following goals through the MBS purchase program:

• Lower mortgage rates
• Stimulate housing market demand
• Improve real estate market liquidity
• Provide support for the housing finance system

As core pillars of the U.S. housing finance system, Fannie Mae and Freddie Mac will directly benefit from the MBS purchase program:

Indicator	FNMA (Fannie Mae)	FMCC (Freddie Mac)
Current Price	$10.85 (+1.50%)	$10.15 (-0.10%)
Market Capitalization	$12.57 Billion	$6.60 Billion
52-Week Range	$4.83 - $15.99	$4.05 - $14.99
Annual Gain	+117.87%	-
Beta Coefficient	1.78	-
P/E (TTM)	3.76x	-
ROE	16.92%	-

Gilin API Real-Time Quotation Data [0]

From a technical analysis perspective, FNMA is currently in a sideways consolidation phase, trading in the range of [$10.54, $11.16]. The MACD indicator shows a bearish crossover, while the KDJ indicator shows a bullish crossover, presenting an overall neutral-to-bullish pattern [0].

Real Estate Investment Trusts (REITs) are highly sensitive to changes in interest rate environments:

Ticker	Company Name	Current Price	Daily Performance	Sensitivity Assessment
WELL	Welltower	$186.31	+0.36%	Medium-High
PLD	Prologis	$128.39	+1.17%	Medium
SPG	Simon Property	$184.98	+0.56%	Medium-Low

On January 8, 2026, the real estate sector rose 1.31%, making it one of the best-performing sectors of the day [0].

MBS Purchase Operation ($200 Billion)
        ↓
Increased MBS Demand → Higher Prices → Lower Yields
        ↓
Decline in Mortgage Rates (Expected 10-30 Basis Points Drop)
        ↓
Increased Housing Market Activity → Rising Homebuying Demand

According to research from Keefe, Bruyette & Woods (KBW) analysts, the MBS holdings of government-sponsored enterprises (GSEs) increased 77% year-over-year in the six months ending November 2025, reaching $247 billion [2]. Under the Preferred Stock Purchase Agreement (PSPA) framework, Fannie Mae and Freddie Mac still have room to further purchase MBS.

Analysts generally expect a moderate downward trend in mortgage rates in 2026:

• 30-Year Fixed Mortgage Rate:
  Expected to fluctuate in the 6.0%-6.4% range
• Federal Reserve Policy:
  Expected to continue gradual interest rate cuts, with the federal funds rate possibly reaching 3.0%-3.25% by mid-year
• Optimistic Scenario:
  If economic conditions continue to improve, rates could fall back to the upper 5% range [2]

1. Policy Implementation Uncertainty:
   There are legal disputes over whether Trump can implement the plan directly without congressional approval
2. Inflation Rebound Risk:
   Large-scale asset purchases may reignite inflation expectations
3. Treasury Market Spillover Effect:
   MBS purchases may push up long-term Treasury yields
4. U.S. Dollar Exchange Rate Impact:
   Loose financial conditions may put downward pressure on the U.S. dollar

Investment Target	Recommendation	Expected Return	Risk Level
FNMA/FMCC	Increase Holdings	+10-20%	High Volatility
Homebuilder ETF (XHB)	Monitor	+8-12%	Medium
Mortgage REITs	Prudent	+5-10%	Medium

• FNMA Stop-Loss Level: $9.50
• Single Stock Position Not to Exceed 5%
• Consider Purchasing VIX Put Options for Hedging

1. Evaluate Policy Implementation Effects:
   Closely monitor mortgage application data, housing starts and sales data
2. Focus on GSEs’ Profit Improvement:
   Growth in MBS purchases will enhance the profitability of Fannie Mae and Freddie Mac, which may create conditions for potential privatization [2]
3. Seize Opportunities from Interest Rate Declines:
   Focus on investment opportunities brought by increased refinancing activity

【Recommended Allocation Ratios】
├── Housing Finance Sector (FNMA/FMCC): 5-8%
├── Homebuilders: 3-5%
├── Residential REITs: 3-5%
├── Commercial REITs: 2-3%
└── Cash/Hedging Instruments: Remaining Position

Investors should focus on monitoring the following data indicators:

1. Trend of 30-Year Fixed Mortgage Rates
2. Changes in MBS Yields and Treasury Spreads
3. FHFA Monthly Mortgage Data
4. Housing Starts and Sales Data
5. Changes in MBS Holdings by GSEs
6. Changes in the Federal Reserve’s Balance Sheet

If effectively implemented, the $200 billion MBS purchase program proposed by the Trump administration will have a significant positive impact on the U.S. housing finance sector. The policy has the following characteristics:

• Directly boosts MBS market demand and lowers mortgage rates
• Improves real estate market liquidity and stimulates homebuying demand
• Enhances GSEs’ profitability and lays a foundation for their long-term development
• The market has responded positively to the policy, with the real estate sector outperforming

• Uncertainty exists in policy implementation at the legal and execution levels
• May trigger inflation concerns and affect the Federal Reserve’s monetary policy path
• High beta characteristics imply high volatility risk

The housing finance sector is expected to benefit from policy expectations in the short term, but investors need to closely monitor policy implementation progress and changes in the interest rate environment. It is recommended to adopt a strategy of to seize investment opportunities while controlling risks.

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[1] Reddit Economics - “Trump orders ‘my representatives’ to buy $200 billion in mortgage bonds to lower rates” (https://www.reddit.com/r/Economics/comments/1q7pgtu/trump_orders_my_representatives_to_buy_200/)

[2] HousingWire - “Mortgage rates steady as 2026 housing outlook brightens” (https://www.housingwire.com/articles/mortgage-rates-2026-outlook-2/)

[3] Bell Bank - “Mortgage Market Outlook: Signs of Stability and Opportunity Emerge for 2026” (https://bell.bank/news/mortgage-market-outlook-2026)

[0] Gilin AI Financial Database (Real-time market data, technical analysis, company fundamental data)