Well, President Donald Trump is officially back in office after the long-awaited inauguration took place today in Washington D.C.
He was sworn in as the 47th president of the United States to go along with his 45th.
After what felt like a long waiting game between early November and today, we’re finally going to find out what action he’ll take.
Like most politicians, there’s always a lot of talk, but it doesn’t always result in action.
For the purpose of this website (and this article), my focus is on the direction of mortgage rates, which will be led to by both policy and economic conditions.
Mortgage Rates Are Over 7% to Start Trump’s Second Term
| 30-Year Fixed Rate | First Term | Second Term |
| Start | 4.25% | 7.08% |
| End | 2.85% | ????? |
| High | 5.05% | ????? |
| Low | 2.76% | ????? |
When it comes to mortgage rates, to say things are different this time around would be a huge understatement.
Of course, Trump is talking about a lot of the same stuff eight years later, namely China.
But for reference, the 30-year fixed stood at 4.25% when Trump first took office as president number 45 back on January 20th, 2017.
And was in the mid-3% range when he unexpectedly won the presidential election in November 2016.
Given that the average rate is closer to 7.125% today (I use eighths like mortgage lenders do), it’s a completely different ballgame.
Rates are nearly double what they were back then, and even more than double the lows seen during this first tenure in the Oval Office.
Mortgage Rates Hit Record Lows During Trump’s First Term
Speaking of, mortgage rates hit an all-time low of 2.65% in January 2021 right before Trump left office, per weekly Freddie Mac data.
That was also obviously their lowest point during his first four years in the White House.
The reason rates got so low was because of the pandemic, which led to another round of Quantitative Easing (QE).
QE is the program where the Fed bought trillions worth of mortgage-backed securities (MBS), thereby driving mortgage rates lower.
This resulted in record low mortgage rates, which officially hit their lowest point in history during the week ending January 7th, 2021.
The chances of another round of QE seem pretty bleak at this juncture, though I suppose anything is possible…
But Rates Climbed to a High of 5.05% Midway Through in Late 2018
Things weren’t always peachy for mortgage rates under Trump.
I looked at daily mortgage rate data from Mortgage News Daily and found that mortgage rates hit a high of 5.05% during Trump’s first term.
And you have to remember that a rate of 5% back then felt like the end of the world. Today, it’d be a blessing. Funny how that works.
Anyway, this took place in November 2018 after bond yields began to rise as government spending increased and the economy looked a little too hot.
That government spending combined with tax cuts led to increased treasury bond issuance and was accompanied by several Fed hiked rates (policy tightening).
The Fed justified their hikes based on very low unemployment and rising wages, an early sign that inflation could rear its ugly head.
At the time, we had no idea just how bad inflation was going to get. We also didn’t know a global pandemic would unfold, leading to even more stimulus and government spending.
Anyway, that uptick in rates proved to be short-lived after the Fed began cutting rates in 2019, the first time they had done so since 2008 (the housing crisis).
That was led by uncertainties about the direction and strength of the economy and trade tensions with China (sound familiar?).
What Should We Expect This Time Around?
Well, I’ve already written an entire post about mortgage rates during Trump’s second term and the long and the short of it comes down to what he does vs. what he says.
And also what the economy does during the next four years, which he might have little control of.
The other piece is that like his first election victory, rates surged on the anticipation of what he might do.
But this time they went up about 1% since mid-September, despite him being the front-runner and the expected winner.
In 2016 they also jumped about 75 basis points (0.75%), but only because he wasn’t the expected winner.
So there’s an argument that all of the fears of what might happen under Trump are thoroughly baked in this time.
Meaning it could unwind, similar to what happened in 2017. But we’ve also got wildcards to consider, like the pandemic, which may have just pushed back the inevitable. Ironically, to Trump’s second term.
I wouldn’t be surprised if rates breathe a sign of relief now that’s he’s finally in office. But I also expect lots of swings as he begins to act instead of merely talk.
There are similarities, like the trade wars and the fear of government spending. But we’re also starting from a much different place. The highest mortgage rates in 25 years versus rock-bottom ones when he won in 2016.
As always, be ready for opportunities like any year and watch out for periods where the rate trend isn’t your friend.
Read on: 2025 mortgage rate predictions
Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 18 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on Twitter for hot takes.