Impact of Fiscal Policy and Demographics on Credit Markets

Government fiscal policy greatly influences mortgage rates, which have doubled since the beginning of the first Trump administration due to increased fiscal deficits under multiple administrations. As federal spending rises unchecked, borrowing costs for consumers are expected to continue increasing, exacerbating the affordability issues in the housing market. Additionally, demographic shifts, particularly the aging baby boomer population, create a complex situation where retirees are liquidating savings and starting to sell their homes. This influx of housing at a time when credit is becoming more expensive generates conflicting trends in the market, highlighting local conditions that may vary significantly from broader national patterns.