Pacific Investment Management Co is growing optimistic about mortgage rates dropping in 2026, citing increased Fannie Mae and Freddie Mac purchases of mortgage-backed securities. The shift comes as federal housing policy aims to reduce borrowing costs for American homebuyers.Pimco's outlook reflects broader expectations that government-sponsored enterprises will play a larger role in stabilizing the housing market. These purchases typically help lower rates by increasing demand for mortgage bonds.

Mortgage rates have been a key concern for potential homebuyers as elevated borrowing costs have priced many out of the market. The average rate on 30-year fixed mortgages remains historically high, despite recent declines from peak levels last year. Federal officials have signaled willingness to use additional tools to support housing affordability.

Analysts expect continued intervention could help bring down rates gradually through mid-2026. Market participants are watching closely to see if these purchases translate into meaningful relief for consumers seeking mortgage financing.