2020 Mortgage and Rates Forecast
2020 is upon us. Different agencies are predicting what the 30 Fixed Rates will look like in 2020. But what does all this mean for home sales since focusing on any single prediction is probably going to be wrong. It’s too hard to predict market-driven outcomes, but in my personal opinion, housing sales will continue to be strong. Our biggest issue will continue to be housing stock availability.
2020 Interest Rate Predictions
- The Mortgage Bankers Association predicts: 3.900%
- The National Association of Realtors predicts: 3.600%.
- The National Association of Home Builders: 3.900%
- Freddie Mac: 3.700%
- Fannie Mae: 3.600%
- Average of all agencies: 3.740%
How does the stock market perform during an election year?
According to a USA Today Article, Since 1952, the Dow Jones Industrial Average has climbed 10.1% on average during election years when a sitting president has run for reelection according to the Stock Trader’s Almanac, which is widely used among investors to track historical stock market patterns. Over the same period, the blue-chip average has fallen 1.6% during election years when there's an open field.
One reason why: There’s typically less uncertainty for people who buy and sell stocks when an incumbent is in office and is running for a second term. In the years leading up to an election, sitting presidents tend to roll out new policies or push for lower taxes in an effort to bolster the U.S. economy. Our current President has already done this.
The Bottom Line
Presidential elections tend to bring surprises that keep us anticipating the outcome. Interest rates should keep the economy strong. Peoples perspectives can have an impact on what happens as we prepare to go through what could be a volatile campaign year. Uncertainty can move the economy in either direction. In 2020 there is a clear incumbent candidate and whether or not an incumbent candidate is re-elected, it can have an effect on the economy as well. Markets often experience increases when a sitting president is seeking re-election.
