Political Uncertainty Was Good For Mortgage Rates

May 24, 2017 Posted by Andre Hemmersbach

Political Uncertainty

Growing political uncertainty was good for mortgage rates this last week. Recent economic data had little impact. Mortgage rates ended the week near the best levels since before the November Presidential election.

Following the election of Donald Trump, the stock market rallied and mortgage rates rose. They did so based on pro-growth policy changes planned by President Trump. On Wednesday, allegations of Trump’s interference in an FBI investigation gave investors reason to question the President’s ability to implement these changes. Investors reacted to the resulting political uncertainty by selling stocks and buying bonds, including mortgage-backed securities (MBS). This added demand for MBS was good for mortgage rates.

Housing Starts

Tuesday’s report on housing starts contained mixed news. Overall housing starts in April declined 3% from March, which was well below the expected levels. However, this was due to weakness in the volatile multi-family segment. Single-family housing starts increased slightly in April. Also, Monday’s NAHB housing index showed that home builder confidence surprised to the upside in May and remains at very high levels.

 

About Andre Hemmersbach

Andre Hemmersbach has been working in the mortgage banking business for over 20 year helping people successfully finance their real estate holdings. He can be reached at (310) 540-1330 #137.

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