AgentMarkets & Economy

Is the ‘Trump Tantrum’ mortgage rate spike driving buyer urgency?

Dispatches from agents report stalled deals moving forward and clients coming off the fence
  • The average 30-year fixed-rate mortgage (FRM) spiked to 3.95 percent, from 3.77 percent, according to the Mortgage Bankers Association.
  • This is still lower the 30-year FRM of 3.97 percent recorded last year at this time.
  • Economists say the anticipation of Trump's pledged spending plans and tax cuts have investors anticipating some inflation and a dose of adrenaline to the economy -- and therefore there's been some market volatility.
  • Some real estate agents are seeing consumers reacting to the increases with a sense of urgency by locking in rates and resuming negotiations.

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Historically low mortgage rates have been the spoonful of sugar helping buyers swallow steep home prices, bidding wars and scant affordable housing this year. Then, in a fever pitch, rates jumped 20 basis points immediately after last Tuesday's news amid a wacky post-election bond market. (The 10-year Treasury note, which had for six months hovered around 1.80 percent, grew to 2.07 percent -- the highest reading since last January.) The latest from the Mortgage Bankers Association (MBA) tells us that 30-year fixed-rate mortgages (FRM) spiked to 3.95 percent from 3.77 percent.  Freddie Mac's Primary Mortgage Market Survey showed rates at 3.94% Moreover, Bankrate's national survey released this week showed the 30-year FRM just breaking that 4.00 percent mark, up from 3.73 percent last week. The 'Trump Tantrum' “This week’s increase in mortgage rates, being dubbed the ‘Trump Tantrum,’ is the biggest one week increase since the ‘Taper Tantrum’ in June 2013,"...