The recent election of President-elect Donald Trump has caused some significant movements in the U.S. business and housing markets. One of the immediate impacts has been a rise in the U.S. 10-year Treasury yield, which has also led to an increase in mortgage rates.
Mortgage rates have climbed in response to the benchmark yield, with the average rate on a 30-year fixed mortgage spiking to 7.13%, the highest rate seen since July of this year. While this increase was not as extreme as some had anticipated, it still marks a notable shift in the market.
Housing stocks have also reacted to these changes, with major builders and building material companies like Lennar, D.R. Horton, PulteGroup, Home Depot, and Lowe’s seeing decreases in their stock prices in response to the rising mortgage rates.
President-elect Trump has not outlined a detailed housing plan, but has mentioned initiatives such as deregulation and opening federal land for more home construction. This has garnered support from industry organizations like the National Association of Home Builders, which looks forward to collaborating with the new administration to address housing supply and affordability issues.
Despite the recent rate cut by the Federal Reserve, mortgage rates have been steadily increasing since hitting a low point in September. This trend is largely driven by stronger economic reports, which have influenced bond yields and mortgage rates.
For potential homebuyers, these rate changes can have a significant impact on monthly mortgage payments. For example, a $400,000 home with a 20% down payment on a 30-year fixed mortgage would have seen a difference of $216 in monthly payments between early September and now.
Sales of existing homes have shown a surprising surge this fall, driven primarily by an increase in supply. This influx of inventory has led to a higher level of active listings compared to previous years, providing more options for potential buyers.
As we look ahead, the future of the market remains uncertain and will depend on various factors such as inflation, the economy, and Treasury issuance. Stay tuned to Extreme Investor Network for more updates and analysis on how these developments could impact your investments and financial decisions.