Mortgage-backed securities purchases became the current focus of near-term plans for Fannie Mae and Freddie Mac due to lower-than-anticipated valuations for a planned stock offering, a housing official told Fox Business.
"Today some people say the businesses are worth up to $1 trillion. They're worth $500 billion to $700 billion, we believe," Federal Housing Finance Agency Director Bill Pulte said, noting that some valuations haven't reached that point.
Some analysts have said $500 billion is high, and estimate that it is
Pulte has
(There was not a clear consensus on valuations back then. While there was some discussion of releasing the government-sponsored enterprises from conservatorship at the time, there were no immediate plans for a stock offering or widespread, formal valuations.)
When asked by Fox's Maria Bartiromo if a 2026 offering of certain Fannie Mae and Freddie Mac's shares is still possible, Pulte called it "more likely than not" but said that the decision remains in President Trump's hands.
"Everything's on the table with President Trump. He keeps all options on the table at all times.
Pulte said that the Jan. 8 news of plans for the bond purchases "reduced mortgage rates right away." Freddie Mac's weekly rate report shows home financing costs fell about 10 basis points to
Rate and housing updates
Although mortgage rates have generally declined since then, the benchmark bonds that indicate the direction of long-term borrowing costs have fluctuated at times.
When asked about a 2.5 basis point rise in the mortgage rate-indicative 10-year government bond yield one day this week, Pulte noted that some drivers of financing costs are outside his sphere of influence and more within Treasury Secretary Scott Bessent's.
"What I can say as it pertains to the mortgage rates is that we have reduced the spread. The spreads are tighter, meaning risk is out of the system," Pulte said, referring to how MBS trade relative to Treasury bonds.
The winter months are typically slow for housing finance activity and many mortgages still have pandemic-era rates that are still far below
In January, home resales dropped to their lowest level since September 2024, according to the National Association of Realtors, which attributed this in part to particularly bad weather in some regions.
Reluctance to move on the part of borrowers with low rates from the pandemic also has played a role in constraining existing home sales.
In contrast, new home sales have wavered but generally have remained near a four-year high, according to recent Census reports.
