Fannie Mae and Freddie Mac shares have fallen sharply in recent trading sessions as investors assess the implications of the administration’s proposal to issue new mortgage-backed securities through the Federal Financing Bank rather than pursue an initial public offering. Market participants note that Treasury Secretary Janet Yellen’s plan, unveiled in early January, would effectively extend government conservatorship for at least two more years. Analysts at Keefe, Bruyette & Woods estimate this approach could defer any shareholder dilution event until 2028, prompting institutional holders to reduce their positions by an estimated 12% over the past week. With trading volumes on the OTCQB platform rising by 30% compared with December averages, sentiment surveys show that 68% of surveyed fund managers now believe full privatization will be delayed until after the next presidential election cycle.

Freddie Mac’s latest Primary Mortgage Market Survey reports the average 30-year fixed-rate mortgage fell to 6.06% for the week ending January 15, the lowest level in more than three years. This represents a 10-basis-point drop from the prior week’s 6.16% and a 98-basis-point improvement from 7.04% at the same time last year. The 15-year fixed-rate mortgage also decreased, averaging 5.38%, down from 5.46% a week earlier and 6.27% a year ago. Chief Economist Sam Khater attributes the decline to moderating inflation data and continued Federal Reserve communication that suggests rate increases may be on hold. Following the rate drop, mortgage purchase applications climbed by 15% while refinancing requests surged by 20%, according to the Mortgage Bankers Association, signaling renewed activity ahead of the spring homebuying season.