A question to future homebuyers: how President-elect Donald Trump’s proposed economic moves might shape mortgage rates in the coming year? Whether you’re looking to buy your dream home, refinance, or just curious about how politics plays into your wallet, here’s the lowdown.
The Current Mortgage Scene
Right now, mortgage rates are stubbornly high—hovering around 7%, which is near a 20-year peak. Ouch, right? Even though the Federal Reserve has been cutting interest rates recently, mortgages haven’t budged much. Why? Because factors like economic growth expectations and those pesky 10-year Treasury bond yields are keeping them up.
Tariffs and Inflation: A Recipe for Higher Costs?
Trump’s got big plans to shake up trade policies, including slapping a 25% tariff on imports from Mexico and Canada and a 10% tariff on Chinese goods. What does that mean for us? Well, tariffs tend to make everyday goods pricier, which could push inflation up by about 1%.
If prices climb too fast, the Fed might put the brakes on those interest rate cuts, leaving borrowing costs—like mortgages—high.
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