Mortgage refinancing demand surged 40% in a single week after President Trump ordered a sweeping $200 billion purchase of mortgage bonds — a move that briefly pushed mortgage rates below 6% for the first time in years and sent homeowners scrambling to lock in lower payments, the New York Post reports.

For borrowers who have been waiting — sometimes for years — for a meaningful break in rates, the sudden drop felt like a narrow window cracking open.

According to industry data, refinancing activity was 128% higher than the same week a year ago, as 30-year fixed mortgage rates slid as low as 5.87% early in the week. Mortgage rates typically drift lower by tiny fractions over long stretches of time. This time, they fell sharply — almost overnight.

The catalyst was unmistakable.

On Jan. 8, Trump announced on Truth Social that he had instructed his administration to begin buying mortgage-backed securities on a massive scale.

“This will drive mortgage rates down, monthly payments down, and make the cost of owning a home more affordable,” he wrote.

Later that day, Federal Housing Finance Authority Director Bill Pulte confirmed that Fannie Mae and Freddie Mac would execute the purchases. By the next day, Pulte said the government-backed mortgage giants had already completed $3 billion in bond buys.

The impact showed up fast in application data.

Total mortgage application volume jumped 28.5% from the prior week, even after adjusting for holiday disruptions, according to the Mortgage Bankers Association.

Applications to refinance led the charge, but even home-purchase loans rose 16% week over week and were 13% higher than a year earlier, suggesting buyers who had paused during the holidays were jumping back in.

For homeowners carrying mortgages in the 6% to 7% range, the math was suddenly compelling again.

A dip of even a quarter-point can translate into hundreds of dollars a month in savings — or tens of thousands over the life of a loan — especially for borrowers who bought or refinanced near recent rate peaks.

“Mortgage rates don’t normally move like this,” said one industry executive. “That’s why people reacted so quickly.”

Mortgage rates are closely tied to the market for mortgage-backed securities. When large buyers step in — especially the federal government — demand for those bonds rises, prices climb, and yields fall.

Lenders, flush with cash and facing lower funding costs, can then offer lower rates to borrowers.

UBS analysts estimate the latest bond-buying push could shave more than 0.20 percentage point off 30-year fixed mortgage rates if purchases continue at scale.

That’s meaningful — but it comes with limits.

The average outstanding U.S. mortgage rate sits around 4.4%, well below where new loans are priced. That gap discourages many homeowners from selling or refinancing unless rates fall significantly further.

Even so, the sudden drop below 6% was enough to trigger a burst of pent-up demand.