A few weeks ago, I wrote about how mortgage rates hadn’t really done much since the US presidential election took place.
By not doing much, I thought they didn’t really go anywhere. They certainly moved a lot since then, but really only went in full circle.
In other words, the rates are more or less the same today as they were back at the end of October.
And I pointed out this because both President Trump and Secretary Treasury Scott Bessent have vocalized that makes lower interest rates a priority.
So I wanted to see if they had actually done anything, even if it’s only been a few months.
The mortgage rates advanced higher in front of Trump -Sejr
In the previous post, I questioned whether Trump and Bessent had lowered the mortgage rates.
I did this because there was some praise that they had brought the rates down, with the 30-year-old fixed fall in a six-week stretch from mid-January to early March.
The problem was that the 30-year-old fasting was raised because Trump won the election, as seen in the MND diagram above.
And simply came back after the market relaxed and Bessent did its best to ease rattled nerves.
I would say that Bessent has done a good job of counteracting some of Trump’s more unstable actions in this regard.
But recently, the stock market (and bond yield rose) because of an increasingly ugly trade that now includes the whole world.
There is only so much that Bessent can do if the unexpected continues to happen every other day or week.
Now back to the rates. The 30-year-old fasting was basically 6.75%as it became clear that Trump would win the election.
This was the probable result a few weeks before the election where Trump favored winning.
Even if he wasn’t the winner yet, investors began to bake in expected political actions, such as customs, deportations and tax cuts, all of which are inflationary by nature.
The 30-year-old fasting increased from approx. 6.75% to 7,125% led up to the election before sighing a short breath of relief afterwards.
Then the rates began their ascent again and hit a high of approx. 7.25% in mid -January, which seemed to be their top.
Now, financial data was also published during this period that could have swayed rates, but in my mind there was always upward pressure from the expected policies.
Presidents do not have a big say when it comes to mortgage rates
To be fair, presidents don’t really have anything when it comes to interest rates. At least not directly.
That’s why Trump said he would lower the mortgage rates back to 3% during his campaign sounded silly.
However, a president’s expected policies can have influence, especially if their policies are more aggressive than most.
And between mass sites and global customs threats, it is clear that these policies have the power to move interest rates more than usual.
Of course, to Trump’s credit, this is simply the market movements based on what they expect. Or don’t know (but have worries) that make them defensive.
It is too early that all political things are actually affecting the underlying economic data, which is still the top driving force for mortgage rates.
In other words, unemployment and inflation data provided using the jobs report and the CPI report are ultimately what matters.
However, their significance can be cloudy or minimized due to uncertainty related to trade and politics, which I also pointed out.
Last week, I said the trade war means more than financial data, with a cool CPI report that did little to help the priority rates move lower (when it would probably have).
These were/is the effect of tariffs on the price of goods, which will affect inflation in the near future.
In other words, you can’t get too excited about a soft inflation sprint if you face higher prices (due to tariffs) at the same time.
The markets are forward, so the data from last month does not mean much if conditions are expected to change.
Would the mortgage rates be lower today with Harris as president?
Now is the question of million dollars that the mortgage rates should be lower today if Harris won the election?
It is difficult to know and even harder to quantify, but it is certainly possible. Financial data has cooled since one Hot Jobs report in September.
A slower economy should result in lower priority rates, all else being equal.
But the rates have remained stubbornly high and still hover close to 7% levels, albeit lower than 7.25% seen in mid -January.
However, certainly increased compared to the beginning of October and September, as they were closer to 6%.
It makes you wonder if we didn’t have that much political uncertainty if the financial data would be more right now.
And as such, the mortgage rates would be even lower today. Could they be closer to the levels seen last fall again? Perhaps.
Should they be back to the low 6% area based just on the path of the economy, which most people think is slower? Perhaps.
Instead, the rates may be unnecessarily high due to continuous uncertainty. The next round of Customs Group is expected on April 2nd and can further rattle markets.
However, the irony, however, is some that Trump is the technique of a recession at which time mortgage rates can be much lower. Even lower than they would otherwise be with saying Harris at the helm.
So there could be a short-term higher mortgage rates due to all uncertainty and trade war flip flopping, followed by even lower rates later due to a recession.
Granted, I do not know if lower rates accompanied by a recession would be good for the housing market, which is already historically unaffordable.
Read on: What happens to mortgage rates during a recession?
(Photo: GPA photo archive)
Before creating this site, I worked as a banking director of a wholesale loan in Los Angeles. My practical experience in the early 2000s inspired me to start writing about mortgage loans 19 years ago to help potential (and existing) home buyers better navigate the home loan process. Follow me on x for hot take.