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Hal Bundrick, CFP® · Senior Writer 更新時間 Tue, January 13, 2026 at 2:14 AM GMT+8 7 min read The president may not control mortgage rates directly, but he certainly influenced them recently. When President Trump proposed two new home affordability initiatives, mortgage rates plunged. Will they remain lower? And what are these proposals?
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MORE: See the mortgage lenders with the best interest rates this week.
President Trump's impact on mortgage rates
Presidents don’t have the authority to set industrywide interest rates, nor can they legally require lenders to set their rates in a certain manner.
However, two recent Trump proposals caused the bond market to take notice.
One aimed to ban large investors from investing in single-family real estate. The president believes that barring private equity firms and other institutional investors from buying residential homes would boost affordability for families, especially first-time home buyers.
The other initiative directed government-sponsored Fannie Mae and Freddie Mac to purchase $200 billion in mortgage bonds. Fannie and Freddie provide capital to lenders, and the president said that the bond purchases would lower mortgage rates.
Mortgage rates fell in response to the news on Friday, January 9. Zillow reported the 30-year fixed mortgage rate at 6.05% before the announcements, 5.91% soon after, and 5.89% on the Monday following.
Housing policy changes
Policies that impact home prices, housing, or supply and demand are another way the president can have a hand in mortgage rates, as has been the case with recent events.
Typically, when home-buyer demand or housing prices are high, mortgage lenders increase the rates they charge customers. When demand is low or supply is oversaturated, they may lower rates to drum up more business.
Potential policies that could impact supply and demand include:
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Tariffs, as they impact the costs home builders face for materials
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Homebuilding initiatives, such as former President Biden’s Housing Supply Action Plan
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Home-buying incentives, like the proposed First-time Homebuyer Tax Credit
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Affordable housing initiatives, which impact what buyers pay for their homes
Even seemingly unrelated policies can impact the housing industry and indirectly affect mortgage rates. Immigration policies, for example, can have a trickle-down effect, particularly if they significantly impact the availability or cost of labor for homebuilders.
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Federal Reserve appointments
The Federal Reserve also plays a big role in interest rates. The federal funds rate — which is the rate banks pay to borrow money from each other — is the foundation on which most consumer interest rates are based.
Just think: If a bank is paying more to borrow money, they’ll need to charge customers more as well. Therefore, when the Fed increases its federal funds rate, the rate on most consumer products also tends to rise. When it falls, consumer rates — including mortgage rates — often follow suit.
(Lately, this effect is seen in the weeks preceding an anticipated Fed rate cut, with mortgage rates falling in anticipation of a lower Fed rate, not necessarily after.)
How exactly does the president play a role in all this, though? First, the president nominates the Fed’s chair — the person who reports to Congress on behalf of the Fed, meets with the Treasury secretary, and provides post-meeting commentary to the public. They also nominate the members of the Fed’s Board of Governors.
Both parties play a significant role in shaping the Fed's actions and policies. Although the Senate must ultimately confirm the president’s nominations, it does grant the sitting president some influence over interest rates.
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How does the Federal Reserve rate decision impact mortgage rates?
The 10-year Treasury yield
Another significant influencer on mortgage rates is the 10-year Treasury yield, which represents the rate at which 10-year Treasury bonds are being paid to investors. Long-term mortgage rates tend to move in the same direction as the 10-year yield, so when the Treasury yield is up, mortgage rates typically also rise. When the yield falls, so do rates.
As with the fed funds rate, the president doesn’t directly influence the Treasury yield. However, the moves made by their Fed appointees, as well as their own public statements, remarks, and policy priorities, do factor in.
Why? Because all of these can heavily influence investor sentiment. For example, if investors fear economic trouble is brewing, they’ll be more tempted to buy into the safety of government bonds, which sends demand for Treasurys up and yields down.
A more stable economy and strong feelings of financial security can have the opposite effect, drawing investors away from Treasurys and into riskier investments. Treasury rates then rise to attract more investment.
Economic policy changes
The president’s economic policies also have the power to impact the mortgage rates you see. Tax cuts (or increases), for example, affect the amount of pocket money Americans have and, therefore, how much they can contribute to the economy. This directly contributes to inflation and the Fed’s decisions about interest rates.
Other economic policies, such as tariffs, come into play, as they influence the prices consumers pay for various goods and services and, as a result, Americans’ spending and the U.S. inflation rate.
Generally speaking, when inflation is high, the Fed tends to increase rates to tamp down economic activity. When it’s low, it may opt for rate cuts instead. This keeps consumers borrowing and money flowing into the economy.
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Discover how inflation affects mortgage rates.
Get a lower mortgage rate on your own
Despite recent declines, most buyers and refinancers would probably like to see mortgage rates creep a little lower. Fortunately, waiting for policy changes or Federal Reserve moves isn’t your only option.
In fact, there are several strategies you can use to get a lower mortgage rate all on your own. Here are some options:
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Increase your credit score: Mortgage lenders usually reward higher credit scores with better interest rates, because a high score communicates that you’re more likely to make your payments. To improve your score, pay down your debts, make on-time bill payments, and keep your oldest accounts open to increase your credit age.
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Buy discount points: Buying mortgage discount points essentially means purchasing a rate reduction. You pay a set fee per “point” at closing, which directly lowers your mortgage rate by a fractional amount. You’ll enjoy this lower rate for your entire loan term.
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Consider a temporary rate buydown: This is similar to buying points, though the lower rate only lasts for a few years or less. You may receive a lower rate for the first one, two, or three years of the loan, after which your rate will revert to your originally quoted rate (or you can refinance). While you may have to pay for the buydown, this cost is often covered by the seller, lender, or homebuilder.
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Shop for the best mortgage lender: Rates vary by mortgage lender, so be sure to obtain quotes from at least three or four lenders. According to Freddie Mac, getting quotes from at least four lenders can save you over $1,200 per year.
Making a larger down payment can also help you get a lower interest rate, but be careful about dipping too much into savings. You’ll want a solid emergency fund on hand to cover repairs and home maintenance needs as they arise.
How the president affects mortgage rates FAQs
What factors affect mortgage rates?
Mortgage rates are determined by several factors, including Federal Reserve policy, inflation, the employment market, economic growth, and the 10-year Treasury yield. Your individual credit score, down payment, debts, and other financial factors also play a role.
What causes mortgage rates to drop?
Mortgage rates often drop when inflation falls, home-buying demand slows, the economy cools, or 10-year Treasury yields decline.
Will we ever see a 3% mortgage rate again?
The 3% mortgage rates seen during the peak of the COVID-19 pandemic were a result of extreme actions taken by the Federal Reserve, which lowered the federal funds rate to near zero to stimulate economic activity. Unless another economic crisis of this magnitude occurs, super-low rates like these are unlikely to be seen in the future.
Laura Grace Tarpley edited this article.
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