Tap tap tap. Is this thing on? It’s been a long time since I blogged
with any regularity at all, but today seemed an appropriate day to dust things off and get back into the saddle. I was speaking to a group yesterday and was asked about the blog, where I was reminded that it had been far too long since I had done this blogging thing. So … let’s get back to this, shall we? Now’s as good a time as any.
There was a relatively significant event in the United States yesterday, one in which hundreds of millions of people, and every country in the world, was watching. Did you catch it? The 2016 Presidential Election was held, and Donald J. Trump has been named President-elect. Like it or not, we made our bed, so now we’ll lie in it. I was glued to the TV last night, watching every pundit talk about this and that, and wondering what this all means for the New River Valley real estate market going forward.
In elections past we’ve seen some market caution leading up to, and even after, the election. That’s not unusual, and not unexpected. It’s been the case the last elections I’ve seen as a practicing Realtor (2008, 2012, 2016), and it was something we knew was likely. This year, however, we saw almost right away that market futures started to fall, and they kept falling throughout the night – the markets did not like the uncertainty that a Trump presidency might bring. This wasn’t altogether unexpected … in the weeks and months leading up to the election, the markets had typically improved when Hillary Clinton was polling well, and it had typically fallen when Donald Trump was polling well. What was unexpected – to this hack, however – was how quickly it started to fall.
And then the emails and texts started to come, from clients and casual observers. “What’s this mean for mortgage rates?” “Should I lock my refinance?” Since I’m a wealth of knowledge on this subject, I crunched the numbers and then asked a few mortgage lenders who really know what’s going on.
The general consensus among the lenders I talked to is that the market is going to be pretty volatile over the next few weeks. As one lender told me, “look – the bond market is tanking, and that moves inverse of mortgage rates, so they’re going to go up. It’s time to lock.” Another surmised that President Trump – that sounds REALLY weird to say – is likely to replace Fed Chairman Janet Yellen, who he’s said has been terrible at her job, with someone more aggressive. All of this is likely going to mean volatility for mortgage interest rates.
Moral of the story? If you plan on buying a home before Inauguration Day 2017, it might make sense for you to do it sooner than later – or at least lock your rate now. If you’ve read for any period of time you know I’m not prone to creating a lot of “the sky is falling” scenarios, but when it comes to what your monthly mortgage payment is going to be … well, it might cost a little more. The lenders I’ve spoken to today have been busy locking rates, and will likely continue to do so in the next several days. Failing to do so is going to mean your monthly payment is likely to rise as we deal with the uncertainty of exactly what a Trump presidency means for the economy as a whole, and the real estate market in the New River Valley in general.
These are interesting times.