Trump’s First Broken Promise Will Be 3% Mortgage Rates
A cost-of-living backlash shaped the presidential election. But voters will be disappointed when they find out interest rates on home loans and big-ticket items won’t be coming down.
Inflation has been a crucial issue for voters.
Photographer: Adam Gray/Getty Images North AmericaIn many ways, Donald Trump was elected to a second presidency as part of a cost-of-living backlash, and unaffordable housing was at the center of Americans’ frustration. High home prices and the highest mortgage rates since the financial crisis meant that as much as a third of the country was effectively locked out of the homeownership dream. That, in turn, helped explain why Americans gave the economy such low marks in consumer sentiment surveys and political polls even as official inflation statistics cooled and the stock market boomed alongside gross domestic product.
The early signs from mortgage and bond markets aren’t encouraging on that front. Trump will have to dramatically moderate his agenda if he’s going to meet voters’ expectations and, even then, his promise to drive mortgage rates down to 3% or lower seems well out of reach in the absence of a sharp economic downturn.