Home Buyers May Have to Wait Until 2025 for Mortgage Rates to Decrease

Home buyers may have to wait until 2025 for mortgage rates to decrease, as the average 30-year mortgage rate rose to 6.84% last week, continuing its consistent weekly increase since September. The moderate housing market during the past two years doesn’t yet appear to be gathering major momentum, and many hoped the Fed’s rate cuts in September would be the catalyst to get home buying moving again.

Trump Tariffs and Immigration Crackdown Fuel Fears of Inflation and Climbing Mortgage Rates

The average 30-year mortgage rate increased again last week to 6.84%, showing a consistent increase for the past two months. Many economists note concern over certain Trump policies that they fear could worsen inflation and may be fueling uncertainty in the housing market. During the election, both candidates focused on addressing the housing crisis with different housing initiatives to bolster the market from the supply side. Now, experts note that Trump’s strict immigration and deportation plans might adversely affect the labor market, and tariffs could cause inflation to rise.

• Is there a housing bubble on the horizon?
• Cash is king: High mortgage rates are changing home-buying trends
• Dave Ramsey explains how your mortgage is key to early retirement

Sabrina Speianu, Economic Manager at Realtor.com, writes, “Concerns over inflation, driven by potential tariffs and rising labor costs due to reduced immigration, initially caused interest rates to rise post-election.”

Election Outcome is Impacting Buyer and Seller Optimism

Overall confidence in the housing market seems also to have been affected by the Trump presidential win. Though the election results didn’t directly impact how all consumers view the housing market, there was a notable difference worth observing. Unsurprisingly, those in favor of Trump’s policies are more likely to view the housing market outlook positively, and those who did not vote for him now view it negatively. 24% of Democrats surveyed by Realtor.com said they were now less likely to buy a home in the next year because of the election, while 18% of Republicans noted they were now more likely to do so.

This sentiment is tied closely to how each party views Trump’s economic policies. Morning Consult found that Republican consumer sentiment rose almost 30% following election day, while Democratic consumer sentiment fell 13%. Consistent with most of the election’s reported voting patterns, men and Gen Z were also more likely to perceive their chances of buying a home positively under a Trump administration than any other demographic.

Related: Dave Ramsey has blunt words on mortgage rates and buying a home now

Related: Veteran fund manager sees world of pain coming for stocks