Uncertainty From Election Impacts Mortgage Rates, Long-Term Bonds

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November 11, 2016

Rising mortgage rates are expected to climb higher within the next few weeks, in part because of Donald Trump’s presidential victory.

The Washington Post reports that the 30-year fixed-rate average climbed to 3.57 percent, up from 3.54 percent a week ago. This is the first time since June that the 30-year fixed rate has been above 3.5 percent in consecutive weeks.

The Trump victory added volatility to the financial markets with long-term bond yields spiking. In a span of just two days, the 10-year Treasury yield soared 24 basis points to 2.01 percent, its highest level since January. Because the movement of long-term bonds tends to indicate whether mortgage rates will move higher or lower, this week’s rapid rise signaled that home loan rates are headed up.

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