Mortgage rates dropped slightly, with the average for 30-year fixed loans at 6.64%. This stability, according to Freddie Mac's chief economist Sam Khater, has led to increased purchase applications, achieving growth rates unseen since late last year. However, recent tariffs announced by President Trump may create market uncertainty, potentially impacting future rates and homebuyer behavior. The downward trend in Treasury yields suggests further rate decreases in upcoming months, but the overall effect of the tariffs on the housing market remains unclear.
Over the last month, the 30-year fixed rate has settled in, making only slight moves in either direction. This stability is reassuring, and borrowers have responded with purchase application demand rising to the highest growth rate since late last year.
President Trump announced a sweeping range of tariffs on Wednesday afternoon that have sent the markets recoiling, and the impact of which will be seen in mortgage rates reported in the coming weeks.
This shock to the system will be felt in the housing market for the rest of the year.
There has been encouraging news in recent months, even during these high mortgage rates, that home sales are picking up relative to a slow 2024.
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