Mortgage rate myths seem to come and go. Rates are higher if there’s a Democrat elected. Rates are higher if the American League wins the World Series, and so on. Will there be a mortgage rate reaction this next Wednesday morning?
An article in today’s Wall Street Journal provided a punch list of what business executives would expect if Obama or Romney were elected President. There was the standard line that one would provide more regulations and one less. One would regulate Wall Street and one would let Wall Street run wild.
There’s nothing that indicates rates will drop before an election to help or hinder an incumbent. What will happen however is an immediate reaction Wednesday morning one way or the other. If the new President is perceived as the one who will jump start the economy, mortgage rates will likely pop up for a few days. If the expectation holds true for an extended period of time, say through December, then you will see mortgage rates in the five percent range right after the first of the year if not sooner.
If the newly elected President is perceived as not being able to fix the economy, then mortgage rates will stay in their current ranges for the next several weeks, below four percent.
Which would you rather see? Higher or lower rates? I think it’s about time we got out of this mess and welcomed higher rates with open arms. That’s how I see it.