Monday, November 3, 2008

Rates After the Election?

Q: Will interest rates go up or down after the election?

A: There's no way to tell. Long-term mortgage interest rates are driven by the demand for the mortgage backed securities that Fannie Mae, Freddie Mac, and Ginnie Mae sell, not by the political environment, despite what many people will have you believe. If rates go up after the election, half the pundits will be correct. If they go down, the other half will be correct.

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