A presidential election can be the epitome of an average American’s participation in the democratic process. For mortgage lenders, however, elections can often spell out anxiety with a capitol A.
Following the shocking and ripple-inducing Brexit decision made in Britain this year, the British stock market plummeted and the value of the British pound dropped so quickly that the world felt the effects of the decision almost immediately. Fast forward to November 8th, 2016, and the United States stock market essentially took the same massive hit.
To sum up this phenomenon plainly, if Hillary Clinton was elected president of the United States, the market was projected to keep status quo and move on from the election rather unaffected. However, this time around the American Electoral College decided to shake things up and go for the underdog, Donald Trump. What happened next was unprecedented.
According to CNN Money, “the average rate of a 30-year-fixed rate mortgage has jumped to 3.94%, up from 3.57% last week…The higher rate means the monthly payment on a $250,000 home loan with a 20% down payment would be $948 -- $42 more than it would have been last week” (Vasel, 2016).
While these figures only drag us back to early 2016 mortgage rates (Vasel, 2016), it would be foolish to ignore the progress being made within the housing market over the past year. For an industry that was so heavily affected by The Great Recession of 2008, the 2016 election bore concerning results against the progress being made to restore the market to its former glory.
While the drop caused by the election of 2016 may worry many, the market is already showing signs of stabilization and slowly but surely returning to its pre-election trend line.
Elections can certainly be eye opening when it comes to confidence in the direction we’ve decided to move our country. This reigns especially true when the direct impact of such decisions is so easily traceable in the form of stock market trends.
Regardless of all of this fluctuation in the market, Finance of America Mortgage is still the best place for anyone to go in order to get their home loan approved! Give us a call at (603) 893-4100 and ask to speak with Pamela!