How President-elect Trump May Affect The Housing Market

[fa icon="calendar"] Nov 29, 2016 11:41:46 AM / by Eustis Mortgage

Eustis Mortgage


Since election week, mortgage rates have risen nearly half a percentage point—spiking 30-year fixed home mortgage rates to last year’s levels. Investors throughout the country began selling bonds to honor the President-elect’s mission to lower taxes, encourage deregulation and invest in various infrastructure projects. With increased government spending, we may expect higher inflation to continue yielding higher interest rates in years to come. Let’s take a closer look.

According to a recent interview with Janet Yellen, Chair of the Federal Reserve, the government most likely plans to begin raising short-term interest rates in December. The Federal Open Market Committee will then continue to manage a slow climb in rates. 

“The FOMC continues to expect that the evolution of the economy will warrant only gradual increases in the federal funds rate over time to achieve and maintain maximum employment and price stability,” Yellen reported. “These moves will influence longer-term rates such as mortgages to rise as well.”

Although President-elect Trump has not made a formal announcement on the topic, leaders of the Republican Party have also hinted at the future of the housing market by discussing the idea of retracting the government from the mortgage business. According to David Reiss, a professor at Brooklyn Law School, this may serve as yet another catalyst to rising interest rates; however, chief economist of Fannie Mae, Douglas Duncan, does not think this is reason for potential and current homeowners to get nervous—at all! 

“We’re not jumping to rapid conclusions in our forecast scenario,” reported Duncan. “Right now, we’ve got mortgage rates for 2017 averaging below what the actual numbers are today.”

For more information about the housing market, or for more details about home financing, contact one of our mortgage specialists today and download The Ultimate Guide to Homebuying and Financing.

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Topics: mortgage news, housing market

Eustis Mortgage

Written by Eustis Mortgage

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