Eric Alpuche

Trump argues rate cuts would lower mortgage costs, but markets fear forced easing could reignite inflation and push long-term yields higher.

Mortgage rates track long-term Treasury yields, not short-term Fed cuts, meaning rates can rise if investors demand inflation protection.

Sticky inflation, policy uncertainty, and lost trust in the Fed could lift term premiums, increasing borrowing costs for homebuyers.

Market volatility is already rising, with pressure on stocks and crypto, while gold gains as investors hedge against inflation risks.

Trump’s Rate Cut Promise: Hidden Risks

MBA expects mortgage rates to remain between 6% and 6.5% through 2026, with inflation and federal deficits limiting further declines.

Increased housing supply and stabilizing rates are likely to shift more local markets toward buyer-friendly conditions next year.

Affordability should improve gradually as wage growth outpaces rent and home price gains, easing pressure on household budgets.

First-time buyers may benefit from expanded financing options, though high transaction costs and market frictions remain challenges.