The years of 2% mortgages are long gone, but many people — and politicians — are hoping for their return. President Donald Trump made that one of his campaign promises in 2024, and while we haven’t seen any significant declines yet, there has been some movement in rates.
At the start of 2025, rates for 30-year mortgages averaged 6.91%. By the end of December 2025, they had fallen to 6.15%, according to data from Freddie Mac.
Can Trump take the credit for that reduction? Experts say, not really.
“Mortgage rates are priced by bond markets, not politicians,” says Rick Seese, an associate broker with Greenridge Realty in Lowell, Michigan. “I think rates in 2025 reflected the continual cooling of inflation.”
However, the Trump administration may have contributed to that cooling inflation by creating economic conditions that resulted in an uptick in both unemployment and investor confidence. As we head into 2026, housing experts say rates may continue to fall, but no one should expect to see 2% mortgages anytime soon — if ever.
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How Mortgage Rates Are Set
Much of the discussion around interest rates focuses on the federal funds rate set by the Federal Reserve. While that rate, which is used by financial institutions for short-term lending, can influence borrowing costs, it is less important to mortgage rates than the 10-year Treasury yield.
The 10-year Treasury yield represents how much investors can earn by purchasing a 10-year Treasury note. Mortgage companies look at the yield when they set their rates, hoping that the spread between their rate and the 10-year Treasury yield will encourage people to buy mortgage-backed securities instead.
“The spread is what entices investors to invest,” says Aaron Gordon, branch manager with Guild Mortgage. Historically, the spread between the 10-year Treasury yield and mortgage rates has been 1.7%-1.8%, according to Gordon, though in recent years it’s been as much as 2.7%.
While lenders may use the 10-year Treasury yield as a starting point, there are other factors at play as well.
“It’s about jobs, inflation and spending,” says Melissa Cohn, regional vice president of William Raveis Mortgage. “There is no one specific force that says (for example), Chase, you need to lower your rates.”
[See: When Will Mortgage Rates Go Down? See the 2026 Forecast]
What Caused 2% Mortgage Rates
Although many people are familiar with the interest rates set by the Federal Reserve, the low mortgage rates of the past were more directly tied to a different Fed policy, Gordon says.
In the wake of the Great Recession of 2008, the Federal Reserve jumped into the mortgage-backed securities market and began making purchases that helped push mortgage rates lower.
“They didn’t take their foot off the gas for 14 years,” according to Gordon.
That helped keep mortgage rates artificially low until 2022, when the Federal Reserve backed off on this policy. Nationally, average mortgage rates bottomed out at 2.96% in 2021. Gordon doesn’t foresee them leveraging this approach again unless something catastrophic happens.
“The lowest rates in history are tied to economic calamity,” he says. To get back to 2% rates, “Really, what you’re saying is that the economy is going to tank.”
Under normal economic conditions and without government interference, mortgage rates of 4% to 5% would be more likely than sub-3%.
“If they could find a way to bring the rate of inflation down to 2% without wrecking the economy, that would be a miracle,” Cohn says. “We should be happy we’re back in the 6% range.”
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Can Trump Reduce Mortgage Rates?
While 2% mortgage rates seem unlikely, can the Trump administration take credit for the moderating rates of 2025?
“They can take credit a little bit,” Gordon says, noting the number of federal workers laid off last year. “Unemployment going up brings mortgage rates down.” He adds, “They can (also) claim they created the confidence for investors to jump back in.”
Lowering inflation can also bring down mortgage rates, although some Trump policies, such as tariffs, are inflationary, according to Cohn. Still, consumers continue to spend, and “That’s not going to push rates down,” she adds.
Federal Reserve Chair Jerome Powell is coming to the end of his term, and his replacement could also affect future mortgage rates. Trump has been critical of Powell for not reducing interest rates more aggressively, and while the chair is supposed to work independently, pressure from the president could have an effect.
“I think it’s going to come down to how much influence Trump has over the next Fed chief,” Gordon says. “If he has a lot of influence, you might see the Fed jump in and buy a lot of mortgage-backed securities.” Or Trump may not wait until the new Federal Reserve chair is selected. In a Jan. 8 post on the social media site Truth Social, the president stated that he was “instructing my representatives to buy $200 billion in mortgage bonds.” Bill Pulte, director of the Federal Housing Finance Agency and chairman of Fannie Mae and Freddie Mac, later said in a post on X that “Fannie and Freddie are the entities that will do the purchases.”
Another possibility, according to Gordon, is that the president could pressure the Federal Housing Finance Agency to change loan-level price adjustments. Known as LLPAs, these can increase or reduce mortgage rates on conventional loans based on a borrower’s credit score, down payment or other factors.
Ultimately, though, Trump can only exert indirect power over mortgage rates since lenders calculate their own pricing by layering inflation risk, credit risk and a profit margin.
“I think if there was a quick and easy solution, the administration would have found it by now,” according to Cohn.
Instead, the best the federal government can do is create an economic climate that encourages investment in mortgage-backed securities and bond markets.
“It depends on what economic reports are coming out,” Seese says. “If deficits balloon or politicians interfere, markets will push rates higher.” Investors who are nervous about economic conditions or the stability of government policies may shy away from purchasing mortgage bonds.
While government officials may want to control mortgage rates, Seese says reality is different: “Bond markets don’t vote, and they don’t care who’s in office.”
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Trump Promised Lower Mortgage Rates. Does He Deserve the Credit? originally appeared on usnews.com
