A recent X post by Federal Housing Finance Agency Director Bill Pulte indicating the government-sponsored enterprises are stepping up their mortgage-backed securities purchases has drawn support from one industry trade group, which is now specifically calling on Freddie Mac to step up its purchases.

In a letter to both Pulte and Treasury Secretary Scott Bessent, Community Home Lenders of America praised Fannie Mae's volume going to $100 billion on July 31 from $71.5 billion at the end of 2025. But it has accused Freddie Mac of sitting on the sideline, with no change between February and July at $55.6 billion.

"Why hasn't this organization answered your call?" the CHLA wrote. "Our sense is that by 'getting Freddie Mac into the game,' we could further reduce spreads by 10 to 12 basis points, a material improvement in today's mortgage markets."

The CHLA said the MBS buys "are making a real difference in having mortgage rates be lower than they otherwise would have been without such actions."

At the end of July, Fannie Mae had a retained portfolio of $173 billion, while Freddie Mac was at $140 billion; both are capped at $225 billion under the Preferred Stock Purchase Agreements, a Sept. 7 Keefe, Bruyette & Woods report noted.

"We would expect GSE buying of agency MBS to continue through 2026 and potentially into 2027 as a tool for supporting mortgage rates, which is likely to continue to support spreads and agency mREIT book values," KBW analyst Bose George wrote at the time.

When asked about Pulte's latest comments, George noted spreads have widened with the 10-year Treasury in the past couple of weeks. "It would make sense for the GSEs to be more active in buying MBS, so the comment seemed reasonable from that standpoint. But if spreads come back in, we're assuming that GSE buying will slow. So, we don't see his comments as reflecting a structural change."

But some commenters on X and elsewhere noted the buys are just as much a way to drive value creation for Fannie Mae and Freddie Mac.

At one point, Pres. Trump pushed some sort of initial public offering to end the conservatorships, creating a video promoting the Great American Mortgage Corp. However, since the August 2025 video, no concrete steps have been taken to end the conservatorships, much to the growing consternation of X posters.

The GSEs should additionally expand their purchase activity into Ginnie Mae securities, the CHLA wrote.

However those borrowers, while in mortgages backed by the government, might have lower credit scores and higher loan-to-value ratios, increasing the risk, some feel.

"Allowing the GSEs to purchase their own MBS was without question a bold move that had a discernible impact on mortgage rates," said Sam Valerde, former acting president of Ginnie Mae. "As the GSEs appear to be reengaging in this activity, however, policymakers should be mindful of the increased interest rate risk that these investments will bring, lest we forget how the conservatorships came to be in the first place." 

Rate pain persists

Rates are now pushing over 7% according to multiple sources. This is a result of the 10-year yield breaking above 5% every day but two since Sept. 14, and closed at or higher on four of those, including Sept. 23, when it reached 5.13%.

It finished the day at 5.11%, up 15 basis points from its prior close. The last time the 10-year yield closed at this level was on July 13, 2007, according to Yahoo Finance. Reports of higher oil prices and certain economic data running hot has led to increased bets for the Federal Open Market Committee to raise rates again at the October meeting. CME FedWatch currently puts the probability at 68.6% of a 25 basis point hike then.

"Today's number against the last few years changes a monthly payment less than people think," Jason Madiedo, CEO of SimplyPMG said in a comment about today's spike in the 10-year yield. "What it changes is how buyers feel, and that's the part doing the damage."

First-time home buyers aren't waiting for changes in underwriting standards. They are waiting to feel that the housing market is safe for them to act, Madiedo said.

Pulte's post was made on Sept. 18 and said "We are beginning to buy even more, large quantities, as we speak," citing an Inside Mortgage Finance post about the size of the retained portfolios at Fannie Mae and Freddie Mac. Pulte is also the chairman of both companies.

In January, Pres. Trump issued an order for the GSEs to purchase $200 billion in MBS to drive mortgage rates lower. Rates actually were at 5.98% for Feb. 26, the Freddie Mac Primary Market Survey reported.

But over the following weekend, the U.S. and Israel started its current conflict with Iran, which has resulted in increased inflation rates due to energy prices.

The CHLA letter noted the President's announcement did have the intended effect, driving the mortgage/Treasury spread to 200 basis points earlier this year from 220 basis points in the summer of 2025.

"While the spread did drop below 190 basis points a couple times earlier this year, it now stands at 219 basis points," CHLA said.

The Weekly Application Survey released on Wednesday morning by the Mortgage Bankers Association had the conforming 30-year fixed rate mortgage at 7.12%, a gain of 15 basis points. This is the highest since May 2024.

In its weekly agency MBS report for Sept. 18, Bank of America Securities rate strategies pushed their forecast for the 10-year higher to 5%, from the previous 4.5%.

"Once the Fed reaches restrictive territory, they expect markets to begin pricing eventual rate cuts, supporting a decline in both 2y and 10y yields to 4.75% by end-'27, below current forwards," the report said. "BofA econ still holds its call for the Fed to hike twice more this year, which is only slightly ahead of market expectations which favor one more hike in 2026."

Fannie Mae and the MBA in their respective September industry outlooks are both calling for mortgage rates at year-end in the upper 6% range.