Are Post-Trump Mortgage Interest Rates Here to Stay?
The presidential election is finally over. But if you’re ready to buy a condominium or single-family home in Chicago, you might worry that the election of Donald Trump will mean higher mortgage interest rates.
And those higher interest rates will mean higher mortgage-loan payments, too.
As this story by HousingWire says, real estate website Zillow reported that shortly after Trump’s election the average interest rate attached to a 30-year fixed-rate mortgage jumped to 3.8 percent. That’s up from 3.38 percent the morning of the election.
HousingWire says that the 10-year Treasury yield also rose following the election. That’s important, too, because mortgage interest rates usually increase when this indicator rises.
This doesn’t mean it’s time for home buyers to panic. First, no one knows whether interest rates will keep rising or whether they will fall again. Secondly, even if the average rate on a 30-year fixed-rate mortgage loan cracks the 4 percent mark, that’s no reason for buyers to panic, either.
Historically, the housing market has thrived even with mortgage interest rates in double digits. There was a time not too long ago, when we all considered interest rates of 7 percent attached to 30-year, fixed-rate loans as outstanding, and affordable, ones.
Maybe we’ve all gotten a bit spoiled when it comes to mortgage rates. That happens when rates remain under 4 percent for 30-year loans and under 3 percent for 15-year fixed-rate mortgages. But the truth is, borrowing money to finance the purchase of a home remains extremely affordable today.
Not only are rates in the 4-percent range historically low, it’s still possible to find condos and single-family homes in Chicago neighborhoods at affordable prices.
Don’t let the fear of rising interest rates keep you from entering the housing market. Instead, call a REALTOR® who knows the neighborhoods that most interest you and begin your search for a new Chicago home today.