Could the midterms affect mortgage rates and housing?

The short answer: a midterm election does not appear to create a dependable, recurring move in national mortgage rates. Our exploratory review of nine midterms from 1990 through 2022 did not find a reliable average relationship between the midterm calendar and either 30 year mortgage rates or 10 year Treasury yields.

That does not mean the 2026 election is irrelevant to housing. An election result can change expectations about federal borrowing, taxes, regulation and the government's role in housing finance. Those expectations can affect Treasury yields, lender decisions and household confidence. The useful question is not, "What do rates usually do after a midterm?" It is, "What changed relative to what markets already expected?"

What we found in the historical data

We compared changes around every November election date from 1990 through 2024. The sample included nine midterm years, presidential election years and the same calendar period in odd numbered years. For mortgage rates and 10 year Treasury yields, we measured the change from about eight weeks before Election Day to about eight weeks after. We also examined a daily economic policy uncertainty index and national housing starts, building permits and new home sales.

The rate result was unremarkable. Mortgage rates increased by an average of about 1.1 basis points during the midterm windows and decreased by about 8.3 basis points during the other-year windows, a raw difference of about 9.5 basis points. After accounting for presidential election years and a simple time trend, the estimated difference remained small relative to its uncertainty. The 10 year Treasury result was even closer to no difference.

One building permits specification produced a statistical result, but it did not survive reasonable checks. Its size changed substantially when we shifted the measurement window. Six outcomes were tested, which also raises the chance of finding one unusual result by accident. We do not read that permits result as evidence that midterms reduce construction.

This was an exploratory comparison, not a causal study or a rate forecast. Nine midterms are a small sample. The same windows also contain Federal Reserve meetings, inflation reports, employment data, recessions and geopolitical events. Election expectations develop before votes are counted, and national totals can hide very different local conditions. Census construction estimates are also revised as more information arrives.

Federal Reserve Bank of St. Louis: 30 year fixed mortgage rate series (new tab) · Federal Reserve Bank of St. Louis: 10 year Treasury constant maturity rate series (new tab) · Federal Reserve Bank of St. Louis: daily U.S. economic policy uncertainty index (new tab) · U.S. Census Bureau: New Residential Construction data and methodology (new tab)

How an election result could still reach mortgage rates

Mortgage rates do not wait for a new Congress to pass a housing bill. Markets can react sooner if an election changes the expected path of federal deficits, inflation or Treasury borrowing. Those expectations can move longer term Treasury yields and the risk premium investors require. A Federal Reserve analysis notes that higher long term Treasury yields raise long term borrowing costs across the economy.

Federal Reserve: Why have far forward nominal Treasury rates increased so much in the past few years? (new tab)

The direction is not automatic. A result that investors associate with more borrowing could put upward pressure on yields. A result that lowers expected growth or inflation could pull yields down. Markets may do very little if the outcome was already priced in, or if competing effects offset each other. That is why party labels alone do not produce a responsible mortgage rate forecast.

Regulation and housing finance move on a slower track

Congress can write or change laws, conduct oversight and shape agency funding. Those powers can influence housing programs, consumer finance rules and the structure of the mortgage market. But an election result is not an enacted law, a final regulation or a lender guideline. Each stage has its own process and timing.

Fannie Mae and Freddie Mac are another reason to separate political headlines from immediate effects. The Federal Housing Finance Agency regulates both enterprises and has served as their conservator since 2008. FHFA says it has ultimate authority over enterprise operations while they remain in conservatorship. A congressional result may change the debate over housing finance, but it does not by itself change an underwriting rule, guarantee fee or loan limit. A proposal matters to a borrower only after the responsible institution adopts and implements it.

Federal Housing Finance Agency: About FHFA (new tab) · Federal Housing Finance Agency: Fannie Mae and Freddie Mac conservatorships (new tab)

Uncertainty can affect decisions beyond changes in mortgage rates

A close election can leave builders, lenders and households unsure which policies will advance. Federal Reserve research describes a general wait and see response to elevated policy uncertainty, including delayed investment and major purchases. Another Federal Reserve study found that banks reduced jumbo mortgage supply around uncertain gubernatorial elections in their home states. That is evidence of a specific credit supply channel, not proof that a national midterm changes conforming mortgage rates.

Federal Reserve: Policy Uncertainty and Bank Mortgage Credit (new tab) · Federal Reserve: Costs of Rising Uncertainty (new tab)

The distinction matters locally. A buyer may pause because of job uncertainty, taxes or confidence even if the quoted mortgage rate barely moves. A builder may reconsider land, materials or financing before a permit or start appears in national data. Those choices can affect activity without creating a clean election pattern in one national rate series.

What to watch in 2026

This election year has already produced a visible housing policy push. On March 13, the White House directed federal agencies to consider changes involving mortgage qualification rules, disclosures, reporting, capital, construction credit, appraisals and mortgage technology. A separate order that day directed agencies to review federal barriers to housing construction. These were directions for agency work, not instant changes to a borrower's loan terms.

On October 22, another order called for agencies to consider steps involving mortgage insurance cancellation, title alternatives for some refinances, manufactured housing and certain USDA and VA direct loans. Treasury also proposed rules implementing restrictions on some large institutional purchases of single family homes. Proposed rules, studies and executive directions can affect expectations, but their borrower impact depends on legal authority, final terms, effective dates and implementation.

White House: Promoting Access to Mortgage Credit (new tab) · White House: Removing Regulatory Barriers to Affordable Home Construction (new tab) · White House: Decreasing Housing Costs for the American People (new tab) · U.S. Treasury: Proposed ROAD to Housing Act rules (new tab)

• Watch the 10 year Treasury yield and mortgage rates together. If they move after an election development, compare the timing with inflation data, Federal Reserve communication and other major news before assigning a cause.
• Watch the gap between mortgage rates and Treasury yields. A wider gap can signal that mortgage specific risks, market capacity or prepayment expectations are changing, even when the Treasury move is modest.
• Watch for enacted laws, final agency actions and published lender or enterprise guidance. A campaign statement, transition proposal or executive announcement may describe an intended direction. It is not the same as an effective rule. Check the effective date, covered loans and implementation details.
• Watch applications, pending sales, builder sentiment, permits and starts, but use several months of data. The Census Bureau cautions that construction estimates are revised and that underlying trends can take months to establish. One monthly change is not a reliable election verdict.

What this means for a housing decision

Do not make a purchase, refinance or lock decision from a claim that rates always rise or fall after midterms. The historical pattern does not support that shortcut. Build the decision around the payment, available cash, time horizon and alternatives you can verify now.

If election news changes the market, ask what actually moved: Treasury yields, mortgage pricing, a final rule or only expectations. Then ask whether the change affects your loan type, property or timeline. That turns a political headline into a housing question you can evaluate.

If you are comparing a purchase or refinance, use our mortgage calculators to test the payment and cash-to-close assumptions before you make a loan decision.

General information only. This article is not a rate quote, political endorsement or prediction of a particular market result.