With change on the horizon after last night’s election, it’s only natural to wonder what “change” will come to the mortgage market as a result. Furthermore, what change to mortgage interest rates have U.S. elections stirred up in the past? We always hear rumblings about mortgage interest rates dropping after an election, but is there any truth to it? Should you refinance now, or wait it out a couple months for rates to drop? In order to find out, some number crunching is in order. (Squelch the grade school flashbacks; we already did the math.)

For the sake of consistency, we collected all of our data from two sources: the Historical Mortgage Rate Data website that lists national average mortgage rates since 1992 and HSH’s National Monthly Mortgage Statistics which tracks rates prior to 1992. While we’ll look at a fairly short time frame, we can still scope the mortgage interest rates as they react to five (going on six) presidential elections. Let’s take a look at the average interest rate by month, starting in September of the election year and running through the February after inauguration (just to see if having a new president in office seems to make a difference).

Mortgage Rates Election Year 2004

September 5.76
October 5.72
November 5.73
December 5.75
January 5.71
February 5.63

For the 2004 election, Bush is reelected into office and the months immediately following the election seem to reflect a slow but steady decline in average national mortgage interest rates.

Mortgage Rates Election Year 2000

September 7.91
October 7.79
November 7.74
December 7.38
January 7.03
February 7.05

For the 2000 presidential election between Gore and Bush we see a significant drop in mortgage interest rates after the election, and a drop nearly 3/4 of a point by his inauguration.

Mortgage Rates Election Year 1996

September 8.23
October 7.92
November 7.62
December 7.60
January 7.82
February 7.65

For the election of 1996, Clinton’s reelection, we see a variation in rates, decreasing steadily through the election. And with the exception of a small jump in January, continuing as such in February.

Mortgage Rates Election Year 1992

September 7.92
October 8.09
November 8.31
December 8.22
January 8.02
February 7.68

1992’s election that Clinton won over Bush Sr. reflects a steady drop in interest rates after the election, with the most significant drop taking place after inauguration.

Mortgage Rates Election Year 1988

September 10.60
October 10.40
November 10.37
December 10.72
January 10.84
February 10.78

The 1999 election marking the end of Reagan’s term and the beginning of Bush’s shows us no steady trend in either rising or falling interest rates. They slowly decline up to the election, then climb and vacillate after November.

So what can we gather from these election-year trends? Of course we can’t predict the future of national mortgage interest rates, but we can note that in three out of the five past election years we observe a slow (and small) but trackable decline in mortgage interest rates. This decline is most evident between the months of November and February, then in the months following (beginning in March) rates begin to fluctuate significantly abandoning the trend. And none of the changes in interest rates that we have tracked seem to rely on whether there is a change of hands in office.

As we can expect from interest rates, they aren’t giving up many secrets to their plans in the future. However we can still confirm that mortgage interest rates are still near historic lows, which means purchasing a home or refinancing is still a timely decision.

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This Post Has 3 Comments

  1. […] How are Mortgage Interest Rates … – With change on the horizon after last night’s election, it’s only natural to wonder what "change" will come to the mortgage market as a result. Furthermore … […]

  2. To Whom It May Concern:

    I am confused…According to your information, “The 1999 election marked the end of Reagan’s term and the beginning of Bush’s”. Now, I’m not an expert on political dealings, however I do know the years when our presidents took office. Hope your editors correct this mistake!

    1. Thank you for your keen eyes! The typo you discovered should have read 1988, as the subheading above it indicated. We certainly didn’t mean to confuse you, and hope you were able to understand from the context where these events fell in the time line. The correction has been made. Thank you for reading mortgage news. We strive to provide quality content at all times, and when we don’t hit the mark, we appreciate our readers taking time out of their busy lives to let us know!

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