Do You Want Red or Blue Peaches?

Today’s Runoff Elections in Georgia will determine which political party holds majority power in the US Senate.  The outcome will shape the national political landscape for the next two years, and could have a significant impact on mortgage rates over the next few days.

Watching The Peach State’s election results is important for all of us in the financial markets.  If Georgia “turns blue,” meaning both Senate seats are won by Democrats, it will shift the balance of power of the national government and set the stage for sweeping changes for not just politics, but for finances as well.

Two Senate seats are up for grabs in Georgia.  Presently, Republicans hold 50 US Senate posts while Democrats hold 48.  If the Democratic nominees win both Georgia Senate positions, both parties will hold 50 seats, allowing for Vice-President Kamala Harris to hold tie-breaker voting rights.  With politics sadly so polarized along party lines, this will allow for Democrats within the Senate to hold a majority and influence policy proposals.

This is of interest to the mortgage market because there are several political agenda items that are much likely to become law if Democrats control the US Senate.  Most notably, a larger stimulus package to combat the economic struggles of the Covid-19 pandemic will likely pass.  This federal financial aid will be paid for by selling government bonds, and when this is done at a large scale it tends to push mortgage rates higher. 

There are obviously other complexities and uncertainties surrounding the direction of our nation’s political and financial arenas, but if you’re considering a refinance in the near future here is the take-home message: a “Blue” Senate means upwards pressure on rates.  As the news headlines of the coming days begin to report Georgia’s election results keep an eye on if both elections are led by Democrats.  You may not want to wait to see the results come in; a safer move would be to get a refinance application in ASAP to lock in a rate before the markets adjust.  Its no guarantee rates will rise in the coming days, but mortgage rates presently have never been lower.  Let me help you take advantage of the current market conditions before they potentially change.