With the presidential election around the corner, mortgage rates might be feeling the effects, depending on who wins. Here’s a quick look at what could happen:
Rates Are Rising
Mortgage rates have increased in recent weeks, influenced by market expectations about possible election outcomes.
Inflation Concerns
Some economic proposals—like tariffs, changes to immigration policy, and tax adjustments—could raise inflation, which tends to push mortgage rates higher.
Cost of Homeownership
The average rate for a 30-year mortgage has gone up, adding roughly $75 a month to the cost of buying a typical home since late September.
What’s Going On?
Economists suggest that discussions around certain economic policies are already making markets cautious about inflation. High inflation typically leads to higher mortgage rates as investors plan for increased costs in the future.
Notably, mortgage rates don’t always follow Fed actions directly. Although the Federal Reserve recently cut its main interest rate, mortgage rates are more influenced by long-term economic expectations like inflation.
What Could Happen Next?
The Fed’s rate cuts might help lower mortgage rates if inflation remains controlled, but we may not see this immediately. Current economic reports showing strong consumer spending and hiring are also influencing rates upward, making the Fed more cautious about further cuts.
Bottom Line
If you’re considering buying a home, keep an eye on how election results may impact mortgage rates. Rates are expected to decrease gradually over time, but in the near term, economic policies tied to the election could keep them elevated.
