Mortgage Rates Drop Amid Market Volatility
Mortgage rates declined slightly this week, with the average 30-year rate down to 6.89%. This follows a period of market volatility caused by the Trump administration's tariff plans.
Analysts attribute the drop to lower Treasury yields, which mortgage rates typically follow. However, the decline in mortgage rates was less pronounced due to concerns about the potential economic impact of tariffs.
"Markets are more focused on the potential growth effects of tariffs and their impact on economic activity," said Zillow senior economist Kara Ng. "As a result, Treasury yields fell, but mortgage rates have not followed suit."
Despite the rate decline, mortgage application activity remains mixed. Refinancing applications increased by 12%, while applications to purchase new homes decreased by 4%.
Investors will closely monitor upcoming economic data, including the latest jobs report and inflation readings, for clues about the Fed's rate-cutting plans and the overall health of the economy.