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How Do Elections Affect Mortgage Rates?

Elections and Mortgage Rates

With election season upon us, many important decisions await voters, from local races to the national ballot. But what does this mean for mortgage rates? And is there any correlation between Presidential elections and mortgage rates? If history is any indication, the answers may surprise you.

Mortgage Rates and Presidential Elections

To determine if mortgage rates have been impacted by presidential elections, 30-year fixed rate mortgages were compared in election years for November to December from 1972 to 2016 using the Primary Mortgage Market Survey from Freddie Mac, which was first recorded in 1971.

Election Cycle

Starting Rate

Ending Rate


Nov-Dec 1972




Nov-Dec 1976




Nov-Dec 1980




Nov-Dec 1984




Nov-Dec 1988




Nov-Dec 1992




Nov-Dec 1996




Nov-Dec 2000




Nov-Dec 2004




Nov-Dec 2008




Nov-Dec 2012




Nov-Dec 2016




Nov-Dec 2020   





Comparing Election Data

As you can see, the past 12 Presidential elections do not show any clear-cut patterns about the rising or falling of mortgage rates. For the most part, rate change percentages have been incremental and inconsistent, if not nearly sideways.

In the case of a rare sizable increase such as in 1980, inflation played a prominent role in shaping increased mortgage rates. So, historically, it could be said that there is not overwhelming evidence that a new president or a re-elected one has a strong bearing on rates. Instead, each election offers a different political climate, unique approach and a varied set of circumstances that can contribute to the overall economy, which, in turn, may influence mortgage interest rates, but not set them.

The Role of the Federal Reserve Board

The Federal Reserve is an independent institution which guides the nation’s economy. The Fed indirectly affects mortgage rates through its policies that impact the price of credit. If the Fed seeks to boost the economy, it implements policies to help keep mortgage interest rates low. If the Fed seeks to tighten the money supply, its policies can result in higher rates.

Ultimately, however, it is not the President, the Congress, or the Fed that sets mortgage rates. The rates rise and fall with financial markets in the U.S. and around the world.

Nobody knows for sure how mortgage rates will fair during the 2020 presidential election. However, there are key indicators that the Fed is willing to do its part to keep the economy moving by its willingness to inject stimulus as it has done over the last several months, which has contributed to record lows in interest rates.

Of course, the economy will continue to be impacted by factors such as the pandemic, the possibility of a vaccine, unemployment, GDP, the U.S. and/or global economy, housing inventory, inflation, the deficit, the stock market, world events, and more. The list goes on. Regardless, the next President is sure to face many challenges, but, for now, mortgage rates don’t appear to be one of them.

Ready to take advantage of today’s historically low mortgage rates? New American Funding can help guide you through the loan process and answer your questions about what loan works for you and your dreams of homeownership.

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