The election is over — what does it mean for interest rates? 

While a new administration is expected to bring a pro-business focus to the White House, economists are expecting a bumpy ride for the real estate industry.

Many people believed the election outcome wouldn't be clear for a day or more after polls closed — but Donald Trump's decisive victory has provided a bit of early certainty to investors, who now have a sense of what policy changes might be coming. 

Expect more rate volatility: In terms of the housing market, mortgage rates may be the area most immediately affected by the new administration's policy plans, said Lisa Sturtevant, chief economist for Bright MLS.

"Trump's fiscal policies can be expected to lead to rising and more unpredictable mortgage rates through the end of this year and into 2025," Sturtevant said, noting that those signals are already out there in the form of rising yields on the 10-year Treasury bonds. 

More barriers for first-time buyers? Sturtevant also expects Trump's policies to drive inflation back up, which would deter the Fed from further rate cuts. "Over the longer term, homeownership could become harder to attain for the first-time and moderate-income homebuyers as his policies favor high-income individuals and existing homeowners."

Rates will fall — eventually: Ralph McLaughlin, senior economist at Realtor.com, agrees that prices and inflation will rise if the new administration moves forward with proposals geared toward higher tariffs and lower taxes, but he says rates should decline over the long term.

"Homebuyers hoping for another dip in mortgage rates by the end of the year will likely be disappointed, but the good news is we still expect the long-run trend in rates to be downward as the fight against pandemic-induced inflation comes to an end," McLaughlin said.

But for now, rates are up: Investors have reacted quickly to the election results. Mortgage News Daily's survey put the average 30-year fixed-rate mortgage at 7.13% on Nov. 6, up from 7.04% the day before and the highest level since July.

Where this leaves the Fed: Economists don't expect the election to influence the Federal Reserve's decision on rates this week. Heading into the election, it was widely anticipated that the Fed would make a 25 basis-point cut to interest rates on Thursday, Nov. 7. If the Fed is focused on the latest inflation and employment data, that will still happen, Sturtevant said.

McLaughlin also expects a 25-point cut on Thursday, but noted that markets are now showing a 33% chance that the Fed will hold off on a December rate cut. Prior to the election, a survey of the Board of Governors projected two consecutive rate cuts in November and December.

"While we still expect mortgage rates to stabilize by the end of the year, they will likely be at a higher level than markets were initially expecting prior to election week," McLaughlin said.

Real estate stocks dip: Traders also weighed in on the election results. While the stock market was up more than 1,400 points with two hours left, nearly all the real estate brokerages were posting one-day losses. Zillow and Compass had the biggest drops, falling more than 7%.