US Mortgage Rates Fall as Markets Weigh Political Gridlock

The average 30-year fixed-rate mortgage fell 13 basis points to 7.05% APR in the week ending November 5, 2026. This decline follows midterm elections that resulted in a divided government, with Democrats controlling Congress and Republicans holding the White House. Investors believe this political gridlock may limit government spending and borrowing, which typically exerts downward pressure on mortgage rates.

Despite this dip, the Federal Reserve System continues to maintain a tight monetary policy to ensure price stability. After raising the federal funds rate from 3.75% to 4.00% in September, the central bank is considering another quarter-point increase at its December 8-9 meeting, a move futures traders estimate has an 80% probability.

Market pressures remain high due to significant government debt and corporate borrowing for AI data centers. Additionally, inflation driven by an ongoing war in Iran continues to impact rates. While the bipartisan 21st Century ROAD to Housing Act passed this summer to address affordability, experts maintain that long-term recovery requires increased housing supply and a more stable geopolitical environment.