In the week leading up to the election, average mortgage rates stood at 3.36 percent for a 30-year fixed rate loan, according to the Mortgage Bankers Association’s (MBA) report. As of November 23, the average is up to 4.00 percent.
The surge in rates can be attributed to several factors. First, the bond market has been volatile since the results of the election were announced. Second, there is some expectation that President-elect Trump’s policies will lead to increased economic growth which, in turn, will push interest rates higher. Third, when the Federal Reserve raised its benchmark Fed funds rate in December 2015, mortgage rates also rose.
With rates continuing to move higher, now could be a good time for borrowers to lock in rates. Those who are considering refinancing should look into pre-approval to lock in their rate. Borrowers who are unable to refinance should consider adjusting their loan terms if possible.
Overall, mortgage rates have been trending higher since the election of Donald Trump, and the trend looks to be continuing. The surge in rates can be attributed to several factors, such as the bond market volatility and expectations for increased economic growth. Those looking to take advantage of low mortgage rates should consider locking in rates or adjusting their loan terms if possible.
The election of Donald Trump as President of the United States has had a tremendous impact on mortgage rates, with the average 30-year fixed rate loan increasing from 3.36 percent prior to the election to 4.00 percent. This increase of 0.64 percentage points is one of the sharpest jumps seen in recent years. Various factors have been identified as contributing to the upward trend in rates, including the bond market’s volatility following the election results, the anticipation of increased economic growth due to President-elect Trump’s policies, and the Federal Reserve’s decision to raise the benchmark Fed funds rate in December 2015.
As mortgage rates continue to head higher, now could be the best time for those looking to secure a loan to act. Pre-approval for a loan can help borrowers lock in a rate and be well positioned to make a purchase. For those unable to refinance, adjusting loan terms may be an option. Adjusting the loan term, such as opting for a 15-year fixed rate loan instead of a 30-year fixed rate loan, can result in significantly lower interest payments over the life of the loan.
The increase in mortgage rates following the election of Donald Trump is a clear indication of how political decisions can have a direct impact on the financial markets. Changing economic conditions, though always present, are usually only really felt when a major event or decision occurs that cause a shift. An event such as the election of Donald Trump, and the policies that come with it, are quite likely to have far-reaching consequences for the housing and mortgage markets. For those looking to secure a loan, now may be the best time to do so before rates continue to move higher.
This article was contributed on Aug 21, 2023
