Where will mortgage rates go after Trump’s State of the Union address?

President Donald Trump will speak to the nation Tuesday night in the annual State of the Union address. While much of it will focus on broad economic issues and the simmering conflict in the Middle East, housing is likely to receive attention too.

On Monday, Mortgage News Daily reported that 30-year fixed rates dropped below 6%. It’s the first time that’s happened since early January, after Trump announced that the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac would buy $200 billion in mortgage-backed securities. MND data is based on best-execution pricing from lender rate sheets.

At HousingWire’s Mortgage Rates Center — which analyzes locked loan rates across all borrower credit profiles — 30-year conforming rates averaged 6.25% on Tuesday. That was down 1 basis point from a week ago. Rates for Federal Housing Administration (FHA) loans declined by 3 bps to 5.98% while rates for 30-year jumbo loans were down 4 bps to 6.03%.

Rates could see sharper movements on Wednesday after Trump’s State of the Union address. The president is expected to address a number of issues related to housing — including his global tariff policy that was upended by the Supreme Court, proposed restrictions on large corporate homebuyers and other affordability initiatives.

Deregulatory efforts, pending legislation

Pete Carroll, executive vice president of public policy and industry relations at Cotality, also believes the Trump administration will announce deregulatory efforts for homebuilders and bank lenders and servicers. The new policies would seek to ease constraints on credit and speed the construction of more homes.

“This likely means lowering or recalibrating reserve and capital requirements introduced by the previous administration to encourage greater mortgage origination,” Carroll said in a statement.

Carroll noted that in 2008, banks originated 60% of mortgages, a share that has dropped to roughly 35% today, according to Federal Reserve data.

“By lowering capital ‘risk weights,’ the Fed is making it profitable for banks to offer mortgages again, which naturally drives down consumer costs through competition,” he added. “While this could improve access to credit, the near-term impact on prices will ultimately be limited by how quickly new housing supply can come online.”

Carroll also thinks that Trump could expand upon the plan for the GSEs to purchase mortgage bonds. “Historically, such moves mark the opening phrase of a broader intervention rather than a one-off, signaling a willingness to lean on housing finance channels to support demand,” he said.

Rates have fallen slightly since Trump’s prior announcement, with another “30-50 bps of headroom expected for further drops,” Carroll said.

Along with Trump’s policy moves, there are multiple pieces of federal legislation that aim to tackle housing supply and affordability. One of these is the ROAD to Housing Act, which is expected to reach the full Senate as early as this week, according to Kimber White, president of the National Association of Mortgage Brokers (NAMB).

The bill was left out of the 2026 National Defense Authorization Act (NDAA) in December, but trade groups like the Mortgage Bankers Association (MBA) and the Community Home Lenders of America (CHLA) have urged lawmakers to reintroduce and pass it.

“The legislation addresses barriers facing homebuyers by strengthening small-dollar mortgage lending, tackling appraisal shortages and bias, modernizing FHA manufactured housing limits, expanding tax-advantaged down payment savings tools and protecting veterans from predatory loan practices while increasing awareness of VA benefits,” White said in a statement.

“These reforms support first-time buyers, rural borrowers, manufactured housing homeowners and service members helping more Americans access safe, affordable home financing.”

Trump’s speech could also inform interest rate traders about the short-term direction of the federal funds rate. According to the CME Group’s FedWatch tool, the odds of a Fed rate cut next month stand at less than 5%. But the likelihood of a 25-bps cut rises to 15% in April, 43% in June and 46% in July.

The Fed cut rates three times in the latter half of 2025 and benchmark rates are now at their lowest levels since September 2022. Regardless, market observers like HousingWire Lead Analyst Logan Mohtashami believe that jobs and inflation data support lower rates.