Higher Mortgage Rates After Trump Election Win

Chartdata

You need 2 min read

·

Post on Nov 07, 2024

46 visitor like this post

Share

Trump Won, My Mortgage Rate Went Up! What Gives?

It's no secret that mortgage rates have been on the rise since Donald Trump won the presidential election in 2016. A lot of folks were scratching their heads, wondering, "What the heck just happened?" Well, let's break down why your mortgage might be feeling the heat.

The Election & The Economy

The thing is, Trump's win wasn't just a political event – it sent ripples through the financial world. The markets, they get a little jittery when things are uncertain. Investors, they start thinking about the future and how it might change.

In this case, the Trump victory signaled a potential shift in economic policy. Folks were wondering if his plans for tax cuts and deregulation would boost the economy. It seemed like a good thing, right? But, this also made folks think that inflation could be on the rise.

Why Inflation Matters (and Mortgage Rates)

Here's the deal: When inflation goes up, the value of money goes down. Think about it: a dollar buys less stuff today than it did a few years ago. So, when banks lend you money for a mortgage, they want to make sure they get their fair share of the deal, even if that dollar isn't worth as much later.

That's why higher inflation often means higher interest rates. Banks want to get a return on their investment that reflects the fact that money isn't as valuable as it used to be.

So, Did Trump's Policies Really Push Up Rates?

It's tough to say for sure. Lots of factors influence mortgage rates, from the global economy to what the Federal Reserve is doing. But, it's fair to say that the uncertainty surrounding Trump's policies definitely played a role in the rate increases we saw after the election.

The Bottom Line:

The Trump win wasn't the sole reason for higher mortgage rates, but it definitely added to the mix. The economy was already showing signs of life, and the election injected a dose of unpredictability into the markets. And, just like that, your mortgage got a little more expensive!