A couple weeks ago, I wrote about how mortgage rates hadn’t really done much since the U.S. presidential election took place.
By not doing much, I meant they didn’t really go anywhere. They definitely moved around a lot since then, but really only went full circle.
In other words, rates are more or less the same today as they were back in late October.
And I pointed this out because both President Trump and Secretary Treasury Scott Bessent have vocalized making lower interest rates a priority.
So I wanted to see if they had actually made any headway, even though it’s only been a few months.
Mortgage Rates Advanced Higher Ahead of Trump Win
In that earlier post, I questioned whether Trump and Bessent had lowered mortgage rates.
I did so because there was some praise that they had brought rates down, with the 30-year fixed falling for a six-week stretch from mid-January to early March.
The problem was, the 30-year fixed was arguably elevated due to Trump winning the election, as seen in the MND chart above.
And simply came back down after the market relaxed and Bessent did his best to ease rattled nerves.
I will say that Bessent has done a good job countering some of Trump’s more volatile actions in this regard.
But recently the stock market sold off (and bond yields went up) because of an increasingly nasty trade war that now includes the entire world.
There’s only so much Bessent can do if the unexpected keeps happening every other day or week.
Now back to the rates. The 30-year fixed was basically 6.75% when it became clear Trump was going to win the election.
This was the likely outcome a couple weeks before the election, with Trump favored to win.
Even if he wasn’t the winner yet, investors were beginning to bake in expected policy actions, like tariffs, deportations, and tax cuts, all of which are inflationary by nature.
The 30-year fixed increased from around 6.75% to 7.125% leading up the election, before sighing a brief breath of relief afterwards.
Then rates began their ascent again, hitting a high of roughly 7.25% in mid-January, which appeared to be their peak.
Now there was economic data released during this period as well that could have swayed rates, but in my mind there was always upward pressure coming from those expected policies.
Presidents Don’t Have a Big Say When It Comes to Mortgage Rates
To be fair, presidents don’t really have a big say when it comes to interest rates. At least not directly.
That’s why Trump saying he was going to lower mortgage rates back to 3% during his campaign sounded silly.
However, a president’s expected policies can make an impact, especially if their policies are more aggressive than most.
And between the mass government layoffs and global tariff threats, it’s clear these policies have the power to move interest rates more than usual.
Of course, to Trump’s credit, this is simply the market making moves based on what they expect. Or don’t know (but have concerns) that make them defensive.
It’s too soon for any policy stuff to actually affect the underlying economic data, which is still probably the top driver of mortgage rates.
In other words, unemployment and inflation data, delivered by way of the jobs report and CPI report, are ultimately what matter.
However, their importance might be clouded or minimized because of uncertainty related to trade and policy, as I pointed out as well.
Last week, I said the trade war matters more than economic data, with a cool CPI report doing little to help mortgage rates move lower (when it otherwise probably would have).
At issue was/is the impact of tariffs on the price of goods, which will affect inflation in the near future.
In other words, you can’t get too excited about a soft inflation print if you’re facing higher prices (due to tariffs) at the same time.
The markets are forward-looking, so the data from last month doesn’t mean much if conditions are expected to change.
Would Mortgage Rates Be Lower Today with Harris as President?
Now the million-dollar question is would mortgage rates be lower today if Harris won the election?
That’s hard to know, and even harder to quantify, but it’s certainly possible. Economic data has cooled since that one hot jobs report in September.
A slowing economy should result in lower mortgage rates, all else equal.
But rates have remained stubbornly high, still hovering close to 7% levels, albeit lower than the 7.25% seen in mid-January.
Though certainly elevated relative to early October and the month of September, when they were closer to 6%.
It makes you wonder if we didn’t have so much policy uncertainty, if the economic data would matter more right now.
And as such, mortgage rates would be even lower today. Could they be closer to those levels seen last fall again? Perhaps.
Should they be back to the low-6% range again based simply on the path of the economy, which most believe is slowing? Maybe.
Instead, rates might be unnecessarily high due to ongoing uncertainty. The next round of tariffs is expected on April 2nd and could further rattle markets.
The irony though, is some think Trump is engineering a recession, at which point mortgage rates could be a lot lower. Even lower than they’d otherwise be with say Harris at the helm.
So there could be near-term higher mortgage rates due to all the uncertainty and trade war flip-flopping, followed by even lower rates later due to a recession.
Granted, I don’t know if lower rates accompanied by a recession would be good for the housing market, which is already historically unaffordable.
Read on: What happens to mortgage rates during a recession?
(photo: GPA Photo Archive)
Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 19 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on X for hot takes.