The Fate of Mortgage Under Bush
After Bush’s second victory, governmental provisions will
occur, changing many laws and issues in society and the economy.
Although the President has control over many social situations,
he does not have a whole lot of power when it comes to things
such as housing.
The mortgage rates will only be influenced indirectly by the
President’s policy changes on taxes and spending. Other
than these regulations, the mortgage rates will not be controlled
by anything other than the economic state and market trends thereafter.
Even though there are many factors that cannot be pinned down
when it comes to mortgage rates, there are expert predictions
of higher rates. The likelihood of higher mortgage rates in the
next four years is almost 100 percent certain, and the only question
is how much and how frequently will the rates change?
The reason that rates will almost positively change is that the
economy is improving and more jobs will create higher incomes
and more investors and loan consumers. What throws things off
is the federal budget deficit--expected to reach $422 billion--that
is likely to increase interest rates. This is very hard to tell
since so far the deficit has not affected interest rates under
Some housing-related topics are likely to pop into the news in
the near future, including mortgage interest deduction and/or
mortgage insurance deduction. There is no clear prediction of
the possibility or probability of these deductions going through,
but it is fairly certain that Fannie Mae and Freddie Mac will
give more options and benefits to low-income homeowners.
It has been said that the President may propose a zero down payment
plan on more mortgages, although this issue is refuted by home
builders who want their fair share of payment.
So, the future capital market and mortgage rates are really part
of a fuzzy picture, but the least we know is that rates will rise
and more loan benefits are possible.