Financial markets are still processing the effects that President-elect Donald Trump will have when he officially takes office in January.
In the aftermath of Trump’s victory last Tuesday, the stock market rose sharply, reaching record highs late last week.
But the stock market isn’t the only thing that’s on the rise since Trump won; mortgage interest rates are skyrocketing as well.
According to data provided by Zillow, the 30-year fixed mortgage interest rate spiked in the aftermath of Trump’s election, rising from 3.38% on Tuesday to 3.8% on Monday morning.
Zillow takes the interest rate data from the interest rates borrowers are quoted on its mortgage marketplace [click here for an example].
Zillow said that Monday morning’s interest rates are the highest rates have been in 2016.
The jump from 3.38% on Tuesday to 3.8% on Monday represents the largest one-week jump in interest rates seen on Zillow Mortgages since July 2013, when mortgage rates jumped 68 basis points in the wake of the “Taper Tantrum.”
According to Zillow’s data, the average interest rate for the 15-year fixed-rate mortgage and the 5/1 adjustable-rate mortgage also rose sharply in the past week, with each trending towards 3% in recent days.
Erin Lantz, vice president of mortgages for Zillow Group, said the increase is driven by the amount of uncertainty that exists within the financial markets right now.
“Mortgage rates have spiked 27 basis points since last Tuesday, rising to the highest levels we’ve seen this year as investors assess the degree of political and economic uncertainty that Trump’s presidential win introduced to the market,” Lantz said.
“As investors move away from U.S government assets, including U.S. mortgage-backed securities, in favor of relatively safer investments, we expect more volatility as markets try to put a price on the political developments,” Lantz continued.
“Consumers considering buying or refinancing now should stay patient, as we’ll likely see rates stabilize once markets find a new equilibrium,” Lantz added.