The mortgage industry is abuzz with news of the highest interest rate spike since January 2016 gaining half a point in just one week. Industry experts have chalked these rates, and the continuously rising stock market numbers, to the recent election. There has been talk of how the newly elected President will impact each and every aspect of the real estate industry but those who aren’t experts in mortgage and real estate are at a bit of a loss as to how President Elect Trump can already have such a profound effect on continually inflating interest rates. From mortgage interest rates to home values, the whole market is bracing itself for what we feel might be an inevitable shift post November 8. Coming off of some of the best years for housing since the devastating market crash we’ve all been aware that ‘Winter is coming’ with the incoming President. Being aware of how and why a presidential election can alter the industry can help us to be more prepared for any shifts in the market.
President Elect Donald Trump campaigned on the platform that his first moves would be to lower taxes and invest in building more infrastructure and transportation resources. The plan is to put $550 billion into both infrastructure and transportation which won’t only boost jobs but also wages, this was one the running points on which he was elected so it will surely remain in focus. This could pose for initial boosts in new home sales if these building projects create jobs, it’s also possible that these jobs could provide higher wages which could also possibly create new leads for lenders and real estate agents. The acquisition of a good job is one of the biggest reasons for a family move, and a surge in infrastrastructure could cause families and singles to relocate, building demand. Some also believe that political party confidence could cause a higher buying rate in red states and slow down in the healthy real estate economy in some blue states, but this is just conjecture and would be a quick rise in sales with very little longevity.
What most mortgage, finance, and real estate professionals are focused on post election is the rapidly rising interest rates that have been scaring some on the fence prospective home buyers into backing out of almost done deals regarding new homes or refinancing. It isn’t only prevalent because of the effect that higher rates can have on buyers but also because we’re less than one month from the announced Federal Reserve rate hike. We have to wonder if this organic rise in interest rates will entice the Federal Reserve to back out of rising rates again. All that can be certain is that generating leads and continuing to focus on customer care will ensure a foundation that can withstand whatever may happen in the coming months and when Donald Trump is sworn in as President of the United States
Recent Comments