Mortgage Bonds, Home Lenders Jump as Trump Targets Housing Costs
Homes under construction in Palm Beach Gardens, Florida on Jan 8.
Photographer: Zak Bennett/BloombergMortgage bonds rose and home-lender stocks rallied after President Donald Trump said he was directing the purchase of $200 billion of the securities in a move to bring down the cost of housing.
Risk premiums on mortgage debt narrowed following the announcement, as investors bought more of the bonds backed by home loans compared to Treasuries. Shares of Rocket Cos Inc., meanwhile, jumped as much as 9.7%, while both LoanDepot Inc. and Opendoor Technologies Inc. amassed double-digit advances in after-hours trading in New York.