Mortgage Rates Dip Amid Tariff Policy Volatility
Mortgage rates have slightly declined this week amidst market fluctuations sparked by evolving tariff plans from the Trump administration. The average 30-year mortgage rate stands at 6.89% this week, down from 6.95% last week. According to Freddie Mac data, 15-year mortgage rates have also fallen to 6.05% from 6.12%.
Sam Khater, Freddie Mac's chief economist, notes, "Mortgage rates have exhibited stability over the past month, and incoming data suggests a robust economy." This week's decline in Treasury yields, which mortgage rates tend to track, is attributed to market uncertainty surrounding the potential economic implications of tariff policies.
However, mortgage rates have remained relatively steady despite the fall in Treasury yields. Zillow senior economist Kara Ng explains that investors are less concerned about inflationary pressures from tariffs and potential Federal Reserve rate cuts, which directly impact mortgage rates. Instead, "markets appeared more focused on the potential growth ramifications of tariffs and their impact on economic activity," Ng states.
Mortgage application activity shows a mixed trend as rates fluctuate around 7%. Refinancing applications have witnessed a 12% increase from the previous week, while purchase applications have declined by 4%, according to the Mortgage Bankers Association.
Investors await upcoming economic indicators, including Friday's job data release and Wednesday's inflation readings, which will provide insights into the economy's health and the Fed's likely rate-cutting trajectory.