The Impact of Presidential Elections on Mortgage Rates and the Housing Market


The 2016 election will surely go down as one of the most memorable in the nation’s history. Perhaps the most contentious contest in recent memory has finally drawn to a close with a victory that left many pundits and poll-watchers scratching their heads over an outcome that few predicted. The results certainly caught the stock market off guard, as U.S. and world indices were full of volatility in the wake of the results.

Current and potential homeowners may be wondering what effect the election will have on mortgage rates and the housing market. If history is a guide, perhaps not much at all. There is a common perception that mortgage rates usually drop after an election, but that perception may be exaggerated and coincidental. Here is a look at the last 11 presidential election years along with the average 30-year fixed-rates at the beginning of the year until January of the following year: 

Jan 1972 - 7.44% Nixon(R) defeats McGovern(D); Jan 1973 - 7.44%: Unchanged

Jan 1976 - 9.02% Carter(D) defeats Ford(R); Jan 1977 - 8.72%:  Slight Decrease

Jan 1980 - 12.88% Reagan(R) defeats Carter(D); Jan 1981 - 14.90%: Increase

Jan 1984 - 13.37% Reagan(R) defeats Mondale(D); Jan 1985 - 13.08%: Slight Decrease

Jan 1988 - 10.38% Bush(R) defeats Dukakis(D); Jan 1989 - 10.73%: Increase

Jan 1992 - 8.43% Clinton(D) defeats Bush(R); Jan 1993 - 7.99%; Decrease

Jan 1996 - 7.03% Clinton(D) defeats Dole(R); Jan 1997 - 7.82%: Increase

Jan 2000 - 8.21% Bush(R) defeats Gore(D); Jan 2001 - 7.03%: Decrease

Jan 2004 - 5.71% Bush(R) defeats Kerry(D); Jan 2005 - 5.71%: Unchanged

Jan 2008 - 5.76% Obama(D) defeats McCain(R); Jan 2009 - 5.05%: Decrease

Jan 2012 - 3.92% Obama(D) defeats Romney(R); Jan 2012 - 3.41%: Decrease


This year, the average rate started out at 3.87 percent and as of October, had fallen to 3.47 percent. It remains to be seen what, if any, effect this year’s election has on rates - and this year’s election has been anything but typical. If recent history is any indication, it shouldn't be bad for the borrower. Five of the last six election years have seen rates either drop (although usually slightly) or remain unchanged. Many economists see the correlation as coincidental (source:, with other economic factors playing a much more significant role than election results in determining the average and direction of mortgage rates, making the recent trend noteworthy.

Also noteworthy from the chart above is how it has never been a better time to be a homebuyer! Rates have steadily decreased election year over election year every single time since the year after Reagan’s first election. Nostalgia for the ‘80s quickly fades when you realize that borrowers were stuck with average rates of 12, 13, and 14 percent in some years. While it remains to be seen where rates go from here, the historic lows in the current environment have been a real benefit to many homebuyers in recent years.

The results of the recent election was a shock to many pundits and poll-watchers. With virtually every poll predicting a lopsided Clinton win, Donald Trump and his supporters caught many by surprise by cruising to victory, winning several states that had consistently gone blue for decades. Trump’s background is in real estate, not politics, and while many of his policies have yet to be spelled out, his stance has consistently been for deregulation when it comes to finance and business. He states that he has been against the Dodd/Frank Bill and regulations established by the Consumer Financial Protection Bureau (CPFB). These regulations are often seen as restricting lenders and making them more fearful to extend loans to customers. It remains uncertain if Trump's presidency will have a postivie effect on the housing market.

One of the President-elect’s main platforms has been his belief that his administration will be good for American business and the American economy. If he is right, it can only be good for housing - and nothing drives the housing market like a strong economy. (source:

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