REAL ESTATE INSIGHTS
Harris Real Estate Daily
By Tim & Julie Harris · December 15, 2025
For months, real estate headlines have fixated on the Federal Reserve: rate cuts, balance sheets, and inflation data. But according to recent reporting from Bloomberg’s Scott Carpenter, a far more relevant development for housing may be happening quietly — and almost no agents are talking about it.
Fannie Mae and Freddie Mac are significantly expanding their retained portfolios of mortgage-backed securities and home loans.
And that matters.
What’s Actually Happening (According to Bloomberg)
As reported by Bloomberg, Fannie Mae and Freddie Mac have increased the amount of mortgage-backed securities and whole loans they keep on their own balance sheets — rather than selling into the secondary market — by more than 25% in just five months through October.
That move has pushed their combined retained portfolios to approximately $234 billion, the highest level since 2021. Analysts cited by Bloomberg estimate the government-sponsored enterprises (GSEs) could add another $100 billion in 2026.
This has fueled speculation that Fannie and Freddie are attempting to:
Support lower mortgage rates
Improve profitability
Strengthen balance sheets ahead of a potential public offering
Whether or not an IPO is imminent, the rate impact is what real estate agents should be paying attention to.
Why This Can Lower Mortgage Rates (In Plain English)
When Fannie Mae and Freddie Mac retain more mortgages and MBS instead of selling them:
They increase demand for mortgages at the source
They reduce reliance on private investors demanding higher yields
They can compress mortgage spreads, even if Treasury yields stay elevated
In practical terms, this means mortgage rates can drift lower or stabilize without the Fed cutting aggressively.
That’s an important shift — and a much more nuanced story than “rates follow the Fed.”
This Is Different From Fed QE — And That’s a Good Thing
During the pandemic, the Fed directly purchased massive amounts of MBS, which artificially suppressed mortgage rates and distorted the housing market.
What’s happening now is not QE.
This is:
GSE balance-sheet expansion
Targeted support within the housing finance system
A quieter, more controlled mechanism
That makes it less inflationary, less dramatic — and more sustainable.
For agents, that’s good news. Stability converts better than chaos.
What This Means for Real Estate Agents Right Now
This development reinforces several important truths agents should be communicating to clients:
1. Mortgage rates don’t need Fed cuts to improve
Rates can ease through structural demand for mortgages, not just headline rate policy.
2. Waiting for “perfect rates” is still a losing strategy
If rates drift down gradually while prices and competition increase, buyers often lose more by waiting.
3. The mortgage market is becoming more predictable
Reduced volatility = better planning = higher consumer confidence.
Agents who understand why rates are behaving the way they are sound informed, calm, and credible — especially compared to agents repeating social-media talking points.
The Bigger Housing Context Agents Should Understand
This move by Fannie and Freddie fits into a broader housing reality:
Inventory remains constrained
Household formation continues
Affordability is stretched but improving at the margins
Policy makers are incentivized to avoid housing shocks
Supporting mortgage liquidity through the GSEs is one of the few levers that can help affordability without crashing prices.
That balance matters — politically and economically.
The Opportunity Most Agents Will Miss
Most agents will wait for headlines that say:
“Mortgage rates plunge”
By then, it’s too late.
The professionals who win are the ones who:
Understand the mechanics early
Educate clients calmly
Frame today’s market as workable — not broken
This is one of those moments.
Not flashy.
Not viral.
But meaningful.
The Bottom Line for Real Estate Agents
Mortgage rates may ease in the months ahead — not because the Fed suddenly changes course, but because Fannie Mae and Freddie Mac are quietly absorbing more mortgages themselves.
That’s a fundamentally different — and more durable — support mechanism for housing.
Agents who understand this can replace fear with facts, hesitation with clarity, and headlines with leadership.
And in markets like this, leadership sells.
— Tim Harris
Harris Real Estate Daily
Data-driven insight. Zero hype.
📬 Interested in Elite Coaching? Text Tim directly at 512-758-0206