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Elections & Mortgage Rates: What Homebuyers Should Know

With every election cycle, Americans wonder if their next mortgage payment hinges on their vote.

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Does the Presidential Election Affect Mortgage Rates?
David Kindness Bio
David Kindness
Mar. 12, 20253 min read
As mortgage rates fluctuate, Americans question how much presidential policies influence housing costs. In reality, the connection isn’t as direct as campaign speeches suggest.

While voters hope new administrations will lower rates, economic and political factors play a bigger role.

Housing affordability remains a major concern. Examining historical trends and market forces helps clarify how policies shape the mortgage landscape—and what that means for buyers and homeowners. For those navigating today’s market, comparing the best mortgage lenders can help secure better rates and terms.

The Federal Reserve’s Role in Mortgage Rates

The Federal Reserve influences mortgage rates through a specific chain of economic actions. Their primary tool is the federal funds rate, which affects borrowing costs between banks. This rate creates broad ripple effects in the economy, particularly on the 10-year Treasury yield—the benchmark mortgage lenders use to set their rates.

A clear example occurred in September 2024: The Fed lowered its rate by half a percent, but mortgage rates increased. This demonstrates how additional market forces can override even significant Fed policy changes.

Historical Election Impact Analysis

It's helpful to examine historical trends to understand the true impact of presidential elections on mortgage rates. Data from 1972 to 2024 reveals no consistent correlation between elections and rate swings. Take a look at the chart below.

Long-Term Trends (1972–2024)

The following data from Freddie Mac's Primary Mortgage Market Survey examines 30-year fixed-rate mortgage averages during election periods. The starting rate represents the week of election day, while the ending rate reflects the rate approximately 30 days later.

Election CycleStarting RateEnding RateRate EffectNotable Context
Nov-Dec 19727.43%7.44%+0.10%Nixon re-election
Nov-Dec 19768.81%8.79%-0.02%Carter victory
Nov-Dec 198014.21%14.79%+0.58%Reagan victory, high inflation era
Nov-Dec 198413.64%14.18%-0.46%Reagan re-election
Nov-Dec 198810.27%10.61%+0.34%Bush victory
Nov-Dec 19928.31%8.21%-0.10%Clinton victory
Nov-Dec 19967.62%7.60%-0.02%Clinton re-election
Nov-Dec 20007.75%7.38%-0.37%Bush victory
Nov-Dec 20045.73%5.75%+0.02%Bush re-election
Nov-Dec 20086.09%5.29%-0.80%Obama victory, great Recession
Nov-Dec 20123.66%3.62%-0.04%Obama re-election
Nov-Dec 20163.75%4.20%+0.45%Trump victory
Nov-Dec 20203.07%3.10%+0.03%Biden victory, pandemic
20246.79%6.69%-0.10%Trump victory, Harris conceded, Trump's 2nd non-consecutive term

Based on over 50 years of data, there’s no consistent correlation between presidential elections and mortgage rate movements. Rate changes during election periods have ranged from a significant decrease (-0.80% in 2008) to notable increases (+0.58% in 1980), with many elections showing minimal impact (less than ±0.10%).

Policy-Driven Exceptions

  • 2016: Rates increased after Trump's first win due to anticipated inflationary policies

  • 2020: The pandemic's economic impact overshadowed election-related rate movements

The 2024 Election: A Case Study

Immediate Effect 

 The week of Election Day, November 5th, 30-year fixed mortgage rates averaged 6.79%. About 30 days later, on December 5th, they dipped slightly to 6.69%.

Market Reactions

Treasury yields surged post-Trump win, reflecting inflation fears. The yield on the 10-year Treasury climbed nearly 20 basis points to 4.48%, its highest level since early July.

This increase is attributed to traders gaining confidence that former President Donald Trump would secure a victory in Tuesday's election and introduce inflationary measures, such as tariffs.

Analysts revised 2025 forecasts upward (6%-7% range). Lisa Sturtevant, chief economist at Bright MLS, predicts Trump's fiscal strategies could cause mortgage rates to rise and become more volatile through the end of 2025. She no longer expects the average 30-year mortgage rate to fall below 6% next year.

Analysts from Raymond James and Associates also predict that mortgage rates will stay elevated for an extended period post-election.

Key Factors Overriding Election Cycles

Several key factors often override the direct impact of election cycles on mortgage rates. These include:

  • Inflation expectations: Perhaps the most critical factor is inflation. Proposed policies, such as Trump’s tariffs and tax cuts, can be seen as inflationary triggers. Raymond James analysts suggest that these policies could lead to prolonged high rates.

  • Global events: Geopolitical events, such as conflicts in the Middle East and Europe, can significantly influence bond markets and, consequently, mortgage rates. Uncertainty in these regions often drives investors towards safer assets like US Treasury bonds, affecting yields.

  • Housing market dynamics: The dynamics within the housing market itself also play a crucial role. Low inventory, historically high cost of materials, and construction labor shortages continue to sustain high prices, impacting affordability and mortgage rates.

2025 Outlook Under Trump’s Policies

Predictions for 2025 suggest that 30-year mortgage rates will likely oscillate between 6% and 7%. However, there is a risk of exceeding 7% if tariffs and other policies worsen inflation.


It's important to note the contradiction between campaign promises and economist warnings. For instance, Trump’s pledge to bring mortgage rates down to 3% has been deemed unrealistic without triggering a recession.

Achieving such a low rate would likely require aggressive Fed intervention, which could adversely affect the economy.

Strategic Advice for Homebuyers

Given the uncertainties and potential ups and downs in the mortgage market, here's some straightforward advice for those looking to buy a home:

  • Monitor treasury yields and fed meetings: Stay up-to-date on the more significant economic factors that affect mortgage rates. Understanding these trends can help you time your purchase.
  • Consider adjustable-rate mortgages (ARMs): ARMs might start with lower interest rates, but remember that those rates can change later on. This could be a good option if you expect your income to increase or if you plan to move in a few years.
  • Explore first-time buyer programs: State and local programs often have grants, low-interest loans, or other benefits to help first-time homebuyers.

Bottom Line

Presidential elections can influence mortgage rates by affecting policy and market confidence, but they're just one piece of a larger economic puzzle.

Looking at the rest of 2025, factors like inflation control and overall economic health will likely have a stronger impact on mortgage rates than who occupies the White House.

For homebuyers, the smartest strategy goes beyond election cycles. Focus on what you can control: Building a strong credit score and keeping your budget flexible.

Understanding this bigger picture helps you make better financial decisions, no matter how the market changes.

David Kindness Bio
Written byDavid Kindness

David Kindness is a finance and tax expert at BestMoney.com. He has written for Investopedia, The Balance, and Techopedia, sharing his deep expertise in taxation, accounting, and finance. A CPA with a Bachelor’s in Accounting, David has worked as a tax specialist and Senior Accountant for high-net-worth clients and businesses in the San Diego area.

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