Financial markets have been experiencing fluctuations due to ongoing tariff discussions, affecting mortgage rates significantly. This week, the average rate for a 30-year mortgage remained nearly steady at 6.81%, reflecting minimal change from the previous week's 6.83%. Meanwhile, the 15-year mortgage rate experienced a slight decline, moving from 6.03% to 5.94%. These figures indicate a cautious stance among investors as they assess the broader economic landscape.
Economic instability has contributed to rising mortgage rates over recent weeks following the announcement of comprehensive tariff policies by President Trump. Despite delays in implementing some tariffs, investor anxiety persists, leading to declines in stock prices and increases in bond yields. The 10-year Treasury yield, which closely correlates with mortgage rates, has shown volatility after repeated criticisms of Federal Reserve Chairman Jerome Powell by President Trump. As of Thursday, it stands at approximately 4.33%. Additionally, applications for mortgages have decreased, with purchase applications falling by 7% and refinancing applications dropping by 20% compared to the prior week.
In this uncertain climate, potential homebuyers are hesitant to commit, influenced by persistently high mortgage rates. Existing home sales witnessed a decline of 5.9% in March compared to the previous month, reaching a seasonally adjusted annual rate of 4.02 million. This trend suggests that buyers may be waiting for more favorable conditions before entering the market. Analysts emphasize that clarity in economic policy could alleviate market unrest and encourage greater participation in the housing sector, fostering growth and stability in both the real estate and financial markets.