For now, record-low mortgage rates seem set to continue
Homebuyers and refinancers have seen record-breaking mortgage rates all throughout 2020.
Interest rates have been driven down largely due to COVID-19, for which there’s no real end in sight.
That means mortgage rates are likely to stay low through the end of 2020 and beyond.
But could the 2020 election shake things up? Many experts say yes.
Some even believe the election results could raise rates by 1% or more.
Here’s what 10 housing experts predict will happen to mortgage rates and the housing market before the end of the year.Find a low rate today (Sep 18th, 2020)
Will mortgage and refinance rates change after the 2020 election?
Presidents don’t set mortgage rates. However, they do set the tone for the economy, which has an indirect effect on whether mortgage rates rise or fall.
The experts we interviewed had varying opinions on how much a Trump or Biden win could impact mortgage rates — if at all.
But looking at their predictions on average, there was one clear trend: Experts predict lower rates if Trump is reelected, and slightly higher rates if Biden wins.
Average mortgage rate forecasts for late-2020
|2020 Election Winner||Average 30-year Mortgage Rate Prediction|
Read on to see why the industry experts we interviewed believe rates could rise or fall based on the outcome of the election.Find and lock a low rate (Sep 18th, 2020)
Expert mortgage rate and housing market predictions for late-2020
We reached out to 10 trusted real estate experts for their 30-year fixed-rate mortgage and real estate market forecast following the 2020 presidential election.
These predictions may help guide you if you’re planning on purchasing a home or refinancing before the end of the year or in 2021.
Dennis Shirshikov, real estate analyst, mortgage rate prediction: 3.5%-4%
Dennis Shirshikov is a real estate analyst with RealEstateWitch.com and adjunct professor of economics at City University of New York.
Mortgage rate prediction if Trump wins: 3.5%
If Trump wins the election: “If Trump wins, the real estate market will slow down, but prices will rise. Housing policy will favor investors and landlords through tax discounts. The Fed will raise interest rates, and mortgage rates will also rise.”
Mortgage rate prediction if Biden wins: 4%
If Joe Biden wins the election: “The real estate market overall will slow down and prices will remain stable. Housing policy will seek to make lending more lenient. The Federal Reserve will raise interest rates, and mortgage rates will rise as well.”
Bruce Ailion, Realtor, mortgage rate prediction: 2.5%-3%
Bruce Ailion is a real estate attorney and Realtor.
Mortgage rate prediction if Trump wins: 2.5%
If Donald Trump wins the election: “Real estate is Donald Trump’s favorite industry. Conservative or liberal, like him or hate him, agree with everything or nothing he does, Trump is the ultimate cheerleader for real estate. If he wins, you have an advocate for lower interest rates, lower taxes, and lower regulation.”
Mortgage rate prediction if Biden wins: About 3%
If Joe Biden wins the election: “The impact of a Biden win on real estate is less certain. We could see a further reduction in the mortgage interest rate deduction, and the same could be true for the deductibility of state, local and property taxes. I expect interest rates to remain low but not as low as in a Trump presidency.”
Rick Sharga, Executive VP at RealtyTrac, mortgage rate prediction: 3.25%-3.5%
Rick Sharga is the executive vice president at RealtyTrac.
Mortgage rate prediction if Trump wins: 3.25%
If Donald Trump wins the election: “A second Trump term will likely see very similar policies to what we saw in the first term: less regulatory control and tax incentives to stimulate real estate investment.
“The Trump administration has also discussed an expansion of the Qualified Opportunity Zone program it launched a few years ago, which offers capital gains relief for real estate development in underserved communities.
“The Fannie Mae and Freddie Mac conservatorship will likely end in a second Trump term. This could make loans more readily available for more borrowers but could also make loans more expensive and somewhat riskier.”
Mortgage rate prediction if Biden wins: 3.5%
If Joe Biden wins the election: “Biden has called for more government investment in affordable housing, which could be funded in part by proceeds from fees attached to home sales backed by government agencies like Fannie Mae, Freddie Mac, and the FHA.
“This would make buying a home somewhat more expensive for most people, but might also provide affordable rental properties to people currently rent-burdened.
“It’s also likely that Biden would reinstate some of the regulations and consumer protections in the financial industry that had been removed or eliminated over the past few years.”Find and lock a low mortgage rate (Sep 18th, 2020)
Ryan Craft, CEO at Saluda Grade, mortgage rate prediction: 3.25%
Ryan Craft is the founder and CEO of Saluda Grade, a real estate advisory firm.
Mortgage rate prediction if Trump wins: 3.25%
If Donald Trump wins the election: “A Trump win will mean the continuation of the status quo — broad support for eviction moratoriums, executive office support for personal subsidies and relief, and an administration that overall seems willing to do anything to soften the blow on the economy.”
Mortgage rate prediction if Biden wins: 3.25%
If Joe Biden wins the election: “Biden most likely will not change much regarding eviction moratoriums and the broad forbearance mandate for COVID-affected homeowners. There will be very little change in the current status of the American housing market and the greatest area of impact: supply.”
Kurt Westfield, Managing Partner at WC Equity Group, mortgage rate prediction: ±3%
Kurt Westfield is Managing Partner at WC Equity Group.
Mortgage rate prediction if Trump wins: About 3%
If Donald Trump wins the election: “Trump will recover losses that coronavirus brought forth and will rapidly restore the position the economy was in before this black swan event. The Fed will likely raise rates to keep excesses at bay. The looming concern is the wave of foreclosures and evictions likely to occur when the moratorium and freezes are lifted.”
Mortgage rate prediction if Biden wins: Higher than 3%
If Joe Biden wins the election: “There will likely be less strength in the housing market, as a whole, as subsidies are enacted that try to shorten the gap between lower-income and high-net-worth individuals.
“The creativity in the private capital world will likely dry up, causing the investment side of housing to stall while the residential side of homeownership likely stays relatively constant. Rates will go up, as will taxes.”
Ryan Fitzgerald, Owner of Raleigh Realty, mortgage rate prediction: 3.25%-4%
Ryan Fitzgerald is a Realtor and the owner of Raleigh Realty and UpHomes.
Mortgage rate prediction if Trump wins: 3.25%
If Donald Trump wins the election: “We will see a lot of what we’ve observed the past four years, with lower interest rates and the opportunity to afford more and leverage more of the government’s and bank’s money. Housing policies are likely to remain the same or similar to what they are now. Interest rates should stay low or possibly go lower.”
Mortgage rate prediction if Biden wins: 4%
If Joe Biden wins the election: “We will see a decent year or two under Biden as it relates to the real estate market overall. However, smart money will begin to sell properties so they don’t have to pay the hefty taxes on homes and the land values that accompany them. Land is likely to become significantly cheaper under Biden, thanks to property tax rate increases. Interest rates will rise along with property taxes.”
Guy Baker, Founder of Wealth Teams Alliance, mortgage rate prediction: 3%-4.1%
Guy Baker is an author and the founder of advisory firm Wealth Teams Alliance.
Mortgage rate prediction if Trump wins: About ~3%
If Donald Trump wins the election: “The economy will likely improve, taxes will stay the same or reduce, and the inflation rate will continue to increase. The Fed is less likely to raise rates unless inflation gets out of control.”
Mortgage rate prediction if Biden wins: 4.1%
If Joe Biden wins the election: “Expect tax rates to rise, the Fed to offset increasing inflation with higher rates, and the economy to slow. All of this will dampen the demand for real estate.”
John Thompson, Dean on the National Institute of Financial Education, mortgage rate prediction: high 2%-low 3%
John Thompson is the founder of C2 Financial Corporation and Dean of the National Institute of Financial Education.
Mortgage rate prediction if Trump wins: High 2% to low 3% range
If Donald Trump wins the election: “We may see more accommodative policies toward the retention and growth of real estate-based assets, which would tend to favor investors as opposed to single-family home buyers. Entry-level points of the market will continue to be strong and robust, and in the upper ends of the market we may see challenges in value and a reduction in prices.”
Mortgage rate prediction post-election: High 2% to low 3% range
If Joe Biden wins the election: “The government may have a more accommodative position toward elements of the housing market when it comes to low- to moderate-income. These areas would likely see greater support, with negative impacts on higher-priced real estate, as higher-income properties are seen as a tax opportunity.”Find and lock a low mortgage rate (Sep 18th, 2020)
Daryl Fairweather, Chief Economist, Redfin, mortgage rate prediction: N/A
Daryl Fairweather is Chief Economist for Redfin.
Housing forecast if Trump wins: Less development of affordable housing
If Donald Trump wins the election: “While the Trump administration previously advocated for relaxing zoning regulations to encourage more building, President Trump has recently made an about-face — now arguing that local governments that have taken steps to relax or eliminate single-family zoning are threatening the suburbs.
“Given this shift in tone, we can assume that a second-term Trump administration will not be enthusiastic about developing more affordable housing.”
Housing forecast if Biden wins: More development of affordable housing and strengthening of Fair Housing rules
If Joe Biden wins the election: “Biden’s housing platform involves using federal housing grants to encourage states to implement inclusionary zoning that would allow more affordable housing development.
“Biden has proposed plans to reduce discriminatory practices in the housing industry and would reinstate the Obama-era Affirmatively Furthering Fair Housing rule, recently terminated by President Trump.”
Natalie Campisi, senior mortgage and housing expert at Forbes Advisor, mortgage rate prediction: N/A
Natalie Campisi is a senior mortgage and housing expert at Forbes Advisor.
Housing forecast if Trump wins: Loosening of Fair Housing rules and less support for affordable housing
If Donald Trump wins the election: “Expect to see rules around fair housing loosen. Trump’s recent action that repealed the Affirmatively Furthering Fair Housing rule, which was designed to ensure that municipalities receiving HUD dollars were taking direction action against discriminatory housing practices, is indicative of this.
“Furthermore, stringent zoning laws — that have hobbled construction in many states — will likely get no help from Trump as he has made several remarks about saving the suburbs from low-income housing.”
Housing forecast if Biden wins: Expanded access to affordable housing and aid for renters
If Joe Biden wins the election: “Biden has a broad housing plan that would touch the lives of almost all Americans. He has proposed to expand the housing voucher program, which helps the poorest American secure housing.
“He would also curb single-family zoning for entities that receive HUD dollars. Biden would further enact legislation that allows renters who pay more than 30 percent of their income and housing to get a tax deduction.”
Why presidential elections impact mortgage and refinance rates
You may not think that a presidential election would affect your ability to purchase a home. But the experts say it could have an impact on housing, even in small ways.
“The presidential election and its results generally affect the real estate market indirectly — but not insignificantly,” says Sharga.
He explains: “The incoming administration’s policies will generally have an impact on the economy and people’s financial outlook.
“For example, an administration that comes into office with plans to dramatically increase government spending can cause interest rates to go up, making buying a home less affordable.
“On the other hand, an administration touting tax cuts might entice businesses to invest in future growth and hire more employees — a cycle that often leads to those employees buying homes,” Sharga says.
“The presidential election and its results generally affect the real estate market indirectly — but not insignificantly” —Rick Sharga, Executive Vice President, RealtyTrac
Natalie Campisi, senior mortgage and housing expert at Forbes Advisor, notes that mortgage rates are not set by the president but can be indirectly influenced by presidential actions.
“The president can also influence the housing market in a number of other ways apart from mortgage rates,” she says.
“For instance, Trump’s tariffs on Canadian lumber have driven up the cost of building materials, which has put more burden on new housing construction.”
The gap in fiscal and economic policies between Joe Biden and Donald Trump is a wide one.
Whoever wins will have significant repercussions on the way Wall Street and Main Street view the economy looking ahead, believes Kurt Westfield.
“Each candidate’s tax plans and job growth agendas will play a large role in the stagnation or continued growth of the economy overall, which can affect interest rates and the housing market,” says Westfield.
When is the right time to lock a mortgage or refinance rate?
If you want to buy a house or refinance in the coming months, your decision on when to move should depend on your financial readiness.
Rates seem likely to stay ultra-low at least until the election, so it might be best to finance sooner rather than later.
But it’s never a good idea to rush into a mortgage if you’re not quite ready. So if you’re still getting your finances and credit in order, it’s ok to wait.
Rates may stay low for a long time. But even in a worst-case scenario — say rates rise to 4%, the highest prediction we received — they’ll still be lower than nearly all of U.S. history. So those waiting to buy likely aren’t putting too much at stake.
For homebuyers and refinancers who are already in the process, our advice remains the same:
Don’t wait for rates to fall much more before locking, because they’re not likely to move down a significant amount.
Mortgage and refinance rates are already near record lows, and those who can lock at today’s rates are in a very good position.Verify your new rate (Sep 18th, 2020)