Mortgage Rate Forecast: Will Bond Market Panic and Tariff Uncertainty Keep Rates High?

Mortgage rates aren't likely to fall anytime soon, even with President Trump's decision to implement a 90-day pause on reciprocal tariffs for most countries. You can blame disarray in the bond market. Treasury yields are directly linked to mortgage rates; when bond yields rise, so do borrowing costs on home loans. Trump's April 2 announcement to slap sweeping tariffs on US trading partners not only sparked a massive plunge in stocks — it also led to a sell-off of government-backed bonds, which sent Treasury yields higher. By Friday's market close, the average rate on a 30-year fixed mortgage had jumped to 7.1%, up more than half a percent in just a week, according to Mortgage News Daily data. Since early 2022, high mortgage rates have locked out new homebuyers. Expensive interest rates have also contributed to keeping resale housing inventory tight, as current homeowners refuse to give up the cheaper, sub-5% mortgage rates they scored just a few years ago. While experts predict rat ... Read full article.