As the 2020 presidential election approaches, many experts are weighing in on how the outcome could impact various aspects of the economy. Melissa Cohn, the regional vice president at William Raveis Mortgage and a 40-year veteran of the mortgage industry, believes that the election could have significant effects on interest rates, mortgage rates, and ultimately, home affordability.
Cohn points out that the relationship between election outcomes and mortgage rates is closely tied to the inflationary policies proposed by the candidates. According to Cohn, if a candidate’s platform includes inflationary measures, such as tariffs and isolationist policies, mortgage rates are likely to increase. This correlation leads Cohn to believe that a Donald Trump election win could result in higher mortgage rates due to his proposed policies.
However, Cohn also warns that inflation could potentially worsen under a Joe Biden presidency. Despite this, she notes that interest rates and mortgage rates have been decreasing during Biden’s presidency. Therefore, if Biden is re-elected, Cohn predicts that the downward trajectory of rates would likely continue.
The impact of lower rates under a Biden presidency could have a positive effect on the real estate market. Cohn explains that with mortgage rates currently high, the real estate market has remained stagnant. However, if rates continue to decrease under Biden, this could potentially revive the market.
„Lower rates are good for real estate values,“ Cohn states. „When rates come down, more buyers come back into the marketplace and prices go up.“ She emphasizes that in the current high-rate environment, potential buyers are hesitant, but a decrease in rates could encourage more activity in the real estate market.
Overall, Cohn’s insights shed light on the potential implications of the election on mortgage rates and home affordability. As the election draws near, it will be interesting to see how the outcome shapes the economic landscape, particularly in the real estate sector.