Trump says mortgage rates have quadrupled since Biden took office. Is he right?


Former U.S. President Donald Trump touched on housing costs during his speech at the Republican National Convention on Thursday, saying that mortgage rates had quadrupled since Joe Biden took office. – patrick t. fallon/Agence France-Presse/Getty Images

Housing has become increasingly unaffordable over the last few years, with rental costs increasing, home prices hitting a record high and mortgage rates surging.

Former President Donald Trump and current President Joe Biden both say they will work to bring those costs down.

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Biden has proposed various policies to help home buyers, including a $10,000 tax credit for middle-class buyers and $25,000 in down-payment assistance for first-generation buyers.

Trump has not set out a detailed policy to address housing inflation. But he spoke about the issue, one that many voters care about, during his speech at the Republican National Convention Thursday night.

“Starting on Day 1, we will drive down prices and make America affordable again. We have to make it affordable. It’s not affordable. People can’t live like this,” Trump said, according to a transcript from the New York Times.

“Under this administration, our current administration, groceries are up 57%, gasoline is up 60 and 70%, mortgage rates have quadrupled, and the fact is it doesn’t matter what they are because you can’t get the money anyway,” he continued.

“Can’t buy houses. Young people can’t get any financing to buy a house. The total household costs have increased an average of $28,000 per family under this administration,” Trump said.

See also: Mortgage rates just dropped to a four-month low. Should you buy a house now — or wait?

His comments come at a time when many would-be buyers are shut out of a challenging housing market. Home prices have been climbing in the wake of the pandemic-era buying frenzy, when remote work and record-low mortgage rates propelled buyers to snap up properties.

But with the pandemic over and inflation rising, the Federal Reserve took steps to tighten monetary policy by raising interest rates, with a goal of bringing inflation back down to 2%. The latest read of inflation, as measured by the federal government, shows it is not there yet, with the consumer-price index up 3% over the last 12 months.

Against this backdrop, home prices continue to rise. And with mortgage rates also elevated, the current housing market is one of the most expensive in U.S. history.

Renters looking to buy are grappling with high barriers to entry, while homeowners who want to move — whether to a bigger home or to downsize — feel “locked in” by ultralow mortgage rates that are too good to give up.

Trump’s claim that home prices are unaffordable is true in many parts of the U.S., according to data from the Federal Reserve Bank of Atlanta’s Home Ownership Affordability Monitor. As of April 2024, the most recent period for which data was available, affordability fell 7.1% from a year ago, the Fed said.

For a household earning a median income of $81,144, buying a median-priced home at $376,000 with a 30-year rate of 7% would translate to a $2,250 monthly mortgage payment of just principal and interest. That amounts to roughly 43% of the household’s income, which is considered unaffordable. Housing is considered affordable when the cost amounts to no more than 30% of a household’s gross income.

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Trump’s claim that mortgage rates have quadrupled under the Biden administration is not true. Rates have gone up, but not by that much.

As seen in the chart below, the 30-year mortgage rate was at 2.65% on Jan. 7, 2021, just before Biden’s inauguration. That’s the lowest rate since Freddie Mac began tracking the data in 1971.

Since then, the 30-year rate’s most recent peak was 7.79% on Oct. 26, 2023. That means that mortgage rates nearly tripled over the course of the Biden administration — they rose by 2.9 times, to be specific — rather than quadrupling.

Trump’s claim that the young people are having a hard time getting financing to buy a house is partially true, depending on how you define “young.”

The National Association of Realtors publishes an annual study of home buyers and sellers that is broken down by generation and includes the top reasons mortgage lenders rejected applications from buyers.

The chart shows that young people aren’t having particular difficulty getting loans, with 3% of those ages 25 to 33 reporting that their application was denied. People ages 44 to 58 have faced more difficulty, with 6% being denied.

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And among Generation Z members — people born between 1997 and 2012 — 26% owned a home in 2023, despite high interest rates, according to an analysis by real-estate brokerage Redfin RDFN. At the same time, “most adult Gen Zers are tracking ahead of where their parents were at the same age,” the company said, “because many Gen Z homeowners were able to buy when rates were near record lows.”

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