Trump Win Spikes Mortgage Rates, Housing Slows

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Post on Nov 07, 2024

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Trump Win Sends Shockwaves Through Housing Market: Mortgage Rates Soar, Sales Stall

Remember that wild ride the stock market took after the 2016 election? Well, the housing market felt the tremors too. It's not exactly a "Trump effect" (though some folks might say it is), but the election definitely threw a wrench into things.

The thing is, when people are uncertain about the future, they tend to hold onto their cash. And that's exactly what happened after Trump won. Investors got spooked, and money started flowing into safer investments like bonds. This drove down bond yields, which, in turn, caused mortgage rates to spike.

So, what does that mean for homebuyers?

Let's just say it wasn't pretty. Higher mortgage rates make it more expensive to borrow money, which means less buying power for those looking to snag a sweet pad. Add to that the uncertainty about the future of government policies, and you've got yourself a recipe for a slowdown in the housing market.

Don't forget about the "Trump effect" on home builders.

They were already dealing with rising lumber prices and labor shortages. But with the market cooling down, demand for new homes took a nosedive. The situation got so bad that some builders had to slash prices to attract buyers.

But hey, not everything was doom and gloom.

While home sales slowed down, they didn't completely tank. And some experts predicted that the market would rebound once the uncertainty cleared.

Fast forward to today, and the housing market is still feeling the aftershocks of 2016.

Although things have stabilized somewhat, rates are still higher than they were before the election. And while the market is showing signs of life, it's definitely not the hot mess it was a few years back.

So, what's the takeaway?

The 2016 election was a major turning point for the housing market. It highlighted the delicate balance of economic factors that can impact home values, and it served as a reminder that the future is never truly certain. For now, it's best to keep an eye on interest rates and the overall economy, as these factors continue to play a major role in the housing market.