After getting married at the start of 2024, California based medical device engineer Priyo Murugesh and his wife were looking into buying a home for about 8 months. The couple recently saved enough for a down payment, and they were getting ready for pre-approval and making serious offers in early 2025. But when Donald Trump won the presidency, higher mortgage rates cemented themselves, the couple’s employment became uncertain, and they decided to push back their decision to buy a home.
Murugesh and his wife both work in fields connected to the government. The medical devices Murugesh works on are regulated by the FDA. His wife works in public education, and the program she is employed by is funded by the Department of Education. With Trump’s promised cuts to government spending and the unknown future impact of Elon Musk’s Department of Government Efficiency, the couple is anxious about what will happen to their jobs – and they are not alone.
“Maybe in three months when we’re looking for a house, we’ll still be fine,” said Murugesh. But the unknown impact of Trump’s policies could impact one or both of the couple’s jobs, so, “in one year, if we would have bought a house, there’s a lot of risk,” he said.
Trump’s victory has come with economic uncertainty, especially for Americans working for the federal government and industries which rely on government funding or regulation. Between a sense of unstable employment and sharply rising mortgage rates, couples and individuals across the country have decided to push back their decision to buy a home. Others have tried to accelerate their plans to buy a home in the hopes of locking in current mortgage rates before they climb any higher. Across the board, Trump’s victory is shaking up people’s home purchasing plans.
In October 2023, the average mortgage rate in the US was the highest it’s been since the COVID-19 pandemic, at 7.79% according to the Federal Reserve Bank of St. Louis. In late September 2024, just a little over a month before the presidential election, the average mortgage rate was the lowest it has been since then, at 6.08%. As of Nov. 27, 2024, the average 30 year fixed mortgage rate is 6.81%.
Over the course of the month leading up to the election, fears of a Trump victory and the inflation which would come with it began driving up the yields on 10 and 30 year treasury bonds, which also pushed up mortgage rates. When Trump’s victory became official, those increases became solidified and rose even higher. Mortgage rates are very slightly up about 0.02 basis points since the election, and they are up around 0.75 basis points since their September low.
Before mortgage rates began to go up again in October, many potential homebuyers were feeling optimistic about the trend of rates coming down, as between May and September, there was a consistent decrease. Inflation seemed to have been brought under control, the federal reserve was cutting interest rates and more rate cuts were expected to come. All of these trends pointed to mortgage rates potentially lowering even more.
“At the end of 2023, our forecast for the 30-year fixed was that it would end at about five and three quarter percent,” said Sarah Foster, an economic analyst at Bankrate. “Everybody kind of thought that the signs were kind of pointing to lower mortgage rates.”
Murugesh and his wife were “absolutely” excited about lower mortgage rates. “We were getting our money in order, putting it in the right places, talking to our parents about our home buying goals. We just got married. We were really making sure everything was in place to get shopping in December and January,” he said.
But with Trump’s victory and the resulting uncertainty of their employment, it just became too risky for the couple to follow through with their plans.
“Postponing a home purchase in the face of potential disruption in income or just uncertainty about the predictability of income, is a prudent financial decision in any environment,” said Greg McBride, chief financial analyst at Bankrate.
On the other side of the country in Atlanta, flight attendant Annie and her boyfriend also had to push back their decision to purchase a home together due to the same considerations of economic uncertainty.
While Annie’s job as a flight attendant is under little threat from the incoming administration, her boyfriend works as a warehouse manager at a business which completes direct to consumer contracts. The job consists almost entirely of importing and shipping foreign goods, so it will be hit extremely hard by Trump’s tariffs.
Annie already owns her house, but her boyfriend was beginning the process of purchasing a larger and more conveniently located home for the two of them to live in. Trump’s victory halted that plan. “We’re thinking, what if the economy goes really bad, and we can’t make both mortgage payments, and no one will buy one of our houses, and we get stuck with two mortgages,” she said.
Other reactions to the election’s impact on the housing market have been taking place as well. Home buyers anxious about future economic turmoil have been trying to buy a home as quickly as possible before Trump tariffs drive up inflation and mortgage rates climb even higher. The mortgage bankers association showed an increase in mortgage applications last week despite the continued rise in rates. Individuals seeking to purchase a home as quickly as possible are likely in industries which face little threat from Trump’s presidency and his policies.
Yet others are looking into moving or renting out their properties. A general sense of uncertainty has seeped into the housing market.
“End of November, I’m not usually getting as many calls as I’ve been getting post-election, so I do think there’s a real curiosity out there,” said Eric Amaal, a real estate broker based in the Catskills. “I do have a lot more business and a lot more phone calls, ever since the election, of people calling and asking what their house could sell for or rent for.”
Many economists and experts say that trying to time a home purchase based on mortgage rates or shifting political winds is unwise, and other factors like employment, marriage or children are more important considerations when making the decision to buy a home. But a great deal of people still try to time the housing market, especially right now.
“What people ought to base their home purchase timing on is their need for housing, and their ability to afford housing, as well as the total cost of home ownership,” said Mark Hamrick, senior economic analyst at Bankrate. “The ability of non-experts to predict the future direction of the housing market and financial markets is limited.”
According to Foster, many young home buyers are hoping for a drastic economic slowdown or crash in the housing market which would make purchasing a home more affordable. Indeed, Murugesh falls into this category of aspiring homeowners. To seriously consider buying a home again, “it would take some kind of early COVID or pre-COVID lock in of really low interest rates,” Murugesh said.
But Foster cautions against this line of thinking. “That’s just not something someone should ever wish for,” she said. “As long as you can take steps right now to really pad up your wallet and your budget and really save up for a down payment as well as emergencies, you can kind of just let that mortgage market work itself out while you hope for something to fall within your budget.”