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President-elect Donald Trump’s victory spurred a rise in in the U.S. 10-year Treasury yield. Mortgage rates, which loosely follow the benchmark yield, are also climbing. The average rate on the 30-year fixed mortgage surged 9 basis points Wednesday to 7.13%, according to Mortgage News Daily. That is the highest rate since July 1 of this year, though not quite the surge some had expected. “The expectation among bond traders coming into the election was that rates would move higher in the event of a Trump victory and especially a red sweep. While the latter is not yet clear, the former is enough for another bump to rates that have already risen abruptly with Trump’s victory odds,” said Matthew Graham, chief operating officer at Mortgage News Daily. Housing stocks reacted in turn, with both the big public builders and building material companies falling sharply. Lennar, D.R. Horton and PulteGroup were all down more than 4% in midday trading Wednesday. Retailers Home Depot and Lowe’s also fell, more than 3% apiece. “The builder stocks are highly sensitive to mortgage rates and mortgage rate expectations. Inflation expectations are higher now, which impacts long-term rates,” said John Burns, CEO of John Burns Real Estate Consulting. While Trump did not lay out a detailed housing plan, he did talk about deregulation and opening federal land for more home construction. The National Association of Home Builders congratulated the president-elect with a statement from its chairman, Carl Harris, saying, “NAHB looks forward to working with the incoming Trump administration and leaders in Congress from both parties to enact a pro-housing legislative and regulatory agenda that increases the nation’s housing supply and eases the nation’s affordability woes.” Big builders have been buying down mortgage rates for their customers, but that has been cutting into their margins. Mortgage rates hit a…

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Filed under: News - @ November 7, 2024 4:21 pm