US mortgage rates keep rising after Trump’s election win

Long-term US mortgage rates continued to surge this week in the aftermath of Donald Trump’s election win.

Mortgage giant Freddie Mac said Wednesday that the average rate on a 30-year fixed rate loan shot up to 4.03 per cent, the highest since July 2015 and up from 3.94 per cent a week earlier. The rate on 15-year home loans climbed to 3.25 per cent, up from 3.14 per cent last week and highest since January.

Long-term US interest rates have climbed since Trump was elected November 8. T

That is largely because bond investors believe the president-elect’s plan to cut taxes and spend massively on roads, bridges, airports and other infrastructure could ignite inflation.

When they foresee rising inflation, investors demand higher long-term rates and pay lower prices for bonds. The yield on 10-year Treasury notes has risen from 1.87 per cent on Election Day to 2.38 per cent Wednesday.

The expectations of economic stimulus from tax cuts and higher infrastructure spending that are driving up interest rates have also pushed stocks higher. On Wednesday, the Dow Jones industrial average closed above 19,000 for the first time.