How mortgage rates are moving after the election

U.S. markets adjust to the election results

With the midterm election now over, many prospective homebuyers are asking whether borrowing will become any more affordable.

Mortgage rates have eased since the Democratic sweep of the U.S. House and Senate, along with a number of state offices, even as ballots continue to be counted.

The national weekly average for a 30-year fixed mortgage fell for the third consecutive week to 7.18%, according to Freddie Mac.

Daily rate trackers show a similar decline. By midday Thursday, Mortgage News Daily reported an average of 7.17%, down from 7.3% on Election Day.

According to The Wall Street Journal, the market reaction to voters’ rebuke of President Donald Trump and Republicans, amid broad economic frustration, helped lift stocks and push down the yield on U.S. Treasury bonds linked to mortgage pricing.

Oil prices also dropped sharply, with the newspaper saying investors viewed the election outcome as raising the odds of an end to the war against Iran. Inflation expectations, it added, also cooled noticeably.

Earlier in the year, mortgage rates had fallen below 6% for the first time since 2022. But after the U.S. and Israel launched a war against Iran, economic uncertainty increased and home-loan costs climbed toward 8%.

It is still unclear whether the recent decline will continue.

Stocks fell sharply on Thursday as investors sold AI and other technology holdings over fears that tighter regulation could be on the way, according to The New York Times. Bonds are typically considered a refuge when equities weaken.

In a recent post, Realtor.com senior economist Hannah Jones said it remains uncertain whether the change in political power in Washington will be enough to affect a housing market that has been under pressure.

“Many newly elected representatives have voiced discontent with the ongoing conflict in the Middle East, which has contributed to rising inflation, so any progress toward resolution could mean lower inflation and softer mortgage rates ahead,” Jones said.

She added that a strong jobs report could slow the pace of rate declines in the near term.

Even after the recent easing, Jones noted that rates are still above 7%, a level that keeps many buyers on the sidelines. At the same time, weak demand is also making sellers reluctant to list their homes.

That has helped drive price cuts on more than 40% of active listings nationwide, she said, giving buyers who can afford to act a stronger position with less competition and more discounts.