When this big change takes place at the White House on inauguration day, January 20, what will it mean for other American homes – and the mortgage rates used to fund them?

Upon entering the country in 2020, 30-year fixed-rate home loans averaged 3.72%. Mortgage rates have hit historic lows 16 times since then, according to the popular weekly survey by mortgage company Freddie Mac. Rates ended the year at an incredibly low average of 2.67%.

The difference compared to the end of 2019 means significant savings on a loan as huge as a mortgage.

Potential buyers and owners who have yet to refinance at lower rates, will look for clues as to the direction mortgage rates could take once Joe Biden becomes president.

Here’s what the experts are anticipating.

Will rates rise under Biden?

Don’t expect rates to change by the time he’s sworn in, but a Biden administration could potentially have an impact on the direction of mortgage rates.

“Expect tax rates to rise, the Fed to offset rising inflation with higher rates, and the economy to slow,” Guy Baker, founder of Wealth Teams Alliance, told The Mortgage Reports .

And here’s this, from Rick Sharga, executive vice president of RealtyTrac: “Biden called for more public investment in affordable housing, which could be funded in part by the proceeds of agency-backed home sales fees. governments like Fannie Mae, Freddie Mac, and the FHA. “

Baker, Sharga and other experts interviewed by The Mortgage Reports in October predicted that 30-year rates would average 3.51% in 2021 under a Biden administration.

But presidents have only limited influence over mortgage rates – the coronavirus pandemic has been the main driver of fall rate in 2020. The country’s ability to contain the virus out of control before it gets enough vaccines will dictate rates after Biden takes office.

If the COVID crisis takes another bad turn, investors could withdraw money from stocks and pour it into Treasury bonds as a safe haven. This would lower the yields (interest) on Treasury bills and mortgage rates would generally follow the same path.

The story continues

How to get low rates in 2021

If rates rise under the new president, borrowers will have to use a few not-so-secret methods to sniff out the lowest possible mortgage rates.

First of all, your credit rating will have to be in great shape, or you will never receive a super low rate.

The best way to find the best rates is to shop around, as rates can vary from lender to lender. Freddie Mac study shows borrowers can save thousands of dollars by compare at least five quotes, instead of saying yes to the very first offer.

If rates start to take off, a home buyer or refinancer could offset the higher borrowing costs by saving money on home insurance. With a little comparison, you could potentially reduce the annual price of your blanket by several hundred dollars.