Mortgage Rates See Increase After Presidential Election

Following the presidential election, the average rate of a 30-year-fixed-rate mortgage increased to 3.94 percent. This higher rate means that the monthly payment on a $250,000 home loan with a 20 percent down payment would be $948, which is an increase of $42 in just a week. At the same time in 2015, a 30-year mortgage was 3.97 percent.

In addition, the 10-year Treasury note closed at 1.85 percent on Election Day. One week later, it was 2.24 percent. Higher yields make borrowing more expensive. Although tight inventory levels have helped to push up housing prices in markets across the country, the low interest rates were helping buyers deal with the higher prices.

However, the prospect of higher rates is starting to affect mortgage applications, with mortgage applications dropping and the Refinance Index taking a hit. Analysts are paying attention to the language that the Federal Reserve uses to get an idea of future policy, which could mean that markets reposition on the next interest rate increase if the central bank takes a more hawkish tone rather than a soothing one with its message.

“It is always important to keep perspective: If you look back, rates are only as bad as when we began 2016,” says Keith Gumbinger, vice president of HSH.com.

In this issue:

5 Real Estate Trends to Watch for 2017

Five Signs Your Local Real Estate Market May Be in a Bubble

Commercial Real Estate Is Facing Some Significant Challenges

What Caused a Recent Spike in Foreclosures?

Homeownership Recovers From 50-Year Low

Mortgage Rates See Increase After Presidential Election

New Residential Construction Starts Jump 25 Percent

Trump’s Tax Plans Could Affect Real Estate Market

Useful Information From the 2016 Homebuyer Survey

What Today’s Student Debt Means for Tomorrow’s Housing Market

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