Mortgage rates have risen even higher after the surprise election of Donald Trump as the 45th president of the United States. With the potential for rates rising even further, many homebuyers might want to lock in their interest rates now, or they could face increasingly unaffordable monthly repayments.
Contrary to what many people believe, mortgage rates are not set by the government. Instead, they are based on mortgage-backed securities (MBS) which are, themselves, traded on the stock market. As their values rise and fall, mortgage rates change, with uncertainty usually leading towards lower rates.
While many expected rates to drop because of post-election uncertainty, this has not happened. As worries about a new, and potentially, radical administration dissolved, mortgage rates and the stock market have both risen. For consumers, this means that current rates might be the best available for the rest of 2016, making it a good idea to take advantage of them now. This is especially true for people in financially unstable circumstances, who might not be able to afford higher costs.
November has been a turbulent month for mortgage rates, with all eyes on the U.S. election - even talk of the Federal Reserve meeting and an extremely good jobs report were dominated by the political topic. Mortgage rates remain unpredictable, especially at a time of great change, but with post-election fears not being realized, the following months could see mortgage rates continue to rise.
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