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Mortgage rates surge as Trumps odds improve

November 1, 2024

Investors who fund most mortgage loans recognize Trump's economic policies as inflationary.

Imposing significantly higher tariffs on all imported goods and "shutting down the border" to immigration, and deporting millions of immigrants in our current low unemployment economy will increase inflationary pressure on prices and wages, while Trump’s promise to make 2017 tax cuts permanent could add to the growing national deficit - more bad news for inflation and hence interest rates.

Economic policies laid out by Trump might reignite inflation and drive up rates on long-term government bonds, analysts say, along with rates on similar investments like mortgage-backed securities that fund most home loans.

One of the best hedges against inflation is owning your own home, and high or low, inflation is likely to alway be with us. A fixed rate mortgage will stay the same or perhaps can be refinanced down, but rent will always be subject to inflation.