Presidential Elections and Interest Rates

    HomeownershipWith the upcoming election on the horizon, it’s only natural to wonder how it will affect us. What will it mean for our taxes? How will it affect my healthcare? What will the election do to interest rates?

    We often hear talk about how mortgage rates drop after an election. One way to determine if mortgage rates are affected by the Presidential election is to see if there is any correlation between their direction and elections.

    Most researchers have concluded that there is no evidence that supports mortgage rates consistently rising or falling in a presidential election year.

    Mark Hulbert, columnist at Market Watch states, “Try as I might, I could find no evidence that interest rates tend to be either higher or lower than average in the weeks and months prior to elections.”

    What Does This Mean for You?

    There is definitely some uncertainty involved as the election draws closer, however, it is more important to look at your own situation before making any decision. While the election’s results can influence the market in one direction or another, there are two significant characteristics of the economy that have a greater impact on the direction of interest rates:

    1. Employment News: Weak employment data tends to push rates lower. Strong employment data tends to put upward pressure on rates.

    2. Foreign Economic News: Uncertainty overseas usually leads to lower rates as foreign investors look to the relative safety of the US financial markets. Positive foreign economic news can cause interest rates to rise.

    The bottom line is that mortgage rates are at historically low levels, so if it makes sense for you to buy or refinance a house, then you should definitely take advantage of these low rates.

    Contact your Homeowners Financial Group Licensed Mortgage Professional to get started on a purchase or refinance loan today!

     

    Lowell Lilley  |  NMLS# 163057  | Licensed Mortgage Professional

    Direct: (480) 397-5012 • Mobile: (602) 571-3451

     

     

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