After some recent fluctuations, mortgage rates have risen to 7%. Earlier in the year, the 30-year fixed mortgage rate dropped from 7.52% in April to 6.11% by September, according to the ResiClub blog. The change at that time was influenced by weaker jobs data. On Sept. 18, the Federal Reserve responded by cutting its short-term interest rate by 50 basis points, initiating a rate-cutting cycle. As a result, many experts believed mortgage rates would decline further by the end of 2024, but so far, that hasn't been the case. There are a number of factors that could be causing this increase, with some experts citing the upcoming election as a primary reason.
Currently, we have a divided government, with the Democratic Party controlling the White House and the Senate, while Republicans control the House. If one party were to achieve a full sweep, it could create an environment where fiscal spending or deficits rise, depending on their approach—especially if Donald Trump or Kamala Harris were to pursue some of their more inflationary policy proposals.