If you have been watching the bond market this week, you’d think it was a terribly slow, sleepy news week. Except it hasn’t been – it’s been a circus since Biden dropped out of the race Sunday…actually since the assassination attempt on President Trump July 13. Here’s why the bond market couldn’t care less.
I’m posting this early because I’m doing something really auspicious for our August. That’s right – yours and mine. I’m taking Friday off. Nothing makes the house of your dreams appear on the market at the right price with the most motivated seller than my out of office message. So you can thank me later. (And text me for anything you need because I have ZERO boundaries.) For now, let’s talk about why interest rates haven’t been reacting to all of the election chaos.
Any President will be held hostage by Congress.
We’ve been speculating on why the market feels frozen. We are only 3.5 months away from election day, but my latest theory is that bond traders might actually be the most levelheaded Americans. It’s possible they are assuming that regardless of who ends up in the White House, they won’t be able to do much for monetary policy because of a gridlocked Congress.
It is important to keep in mind one basic principle of economics. Uncertainty typically leads to improved mortgage rates through a demand for treasury bonds increases. So I will remain hopeful for continued improvement in rates over the second half of this year.
What would a Harris presidency mean for the real estate market?
I’ve shared my thoughts on what another Trump presidency would mean for our local housing market, here in Nevada. Ever the balanced the reporter I was trained to be, I also have a post about what Biden intends to do to solve the housing crisis – though that’s a moot point now. So let’s talk about what our first female president would do, should she be elected.
There was a “Harris Effect” in Treasuries overnight heading into Monday. Demand for govie bonds was invigorated for the first time in four trading sessions and sent yields lower. This rally was based on the excitement of Harris continuing Biden’s fiscal policies, but it didn’t last long, because as mentioned bond traders aren’t your average emotional voter. While they may be weary of the progress, we’d lose on inflation due to Trump’s tariff policies, they also want to wait and see what Kamala’s plans really are.
Housing costs are at a record high.
I don’t need to explain that to you folks. As a senator, Harris pushed a bill called the Rent Relief Act which would have provided a tax credit for renters who make under $100k and of that $100k, 30% is spent on housing costs. She is also proud of her track regard as California’s AG where she went after mortgage lenders following the Housing Crash.
Honestly, we don’t know enough yet about her platform to know how she would impact us, and then do politicians ever do what they say they are going to anyway…
Save the dates as you start to plan for life after summer.
I know, I should bite my tongue – I’m nowhere near ready for summer to be over or for back to school. But I am looking forward to the Future is Female on October 17th, the next Mortgage and Mimosas (if you’re a local realtor) will be on September 26, and we are working on a new grand opening event at 18 on Lakeside (also if you’re here in Reno) – so stay tuned 😊