Mortgage Rates Dip Amidst Market Volatility
Mortgage rates experienced a slight decline this week amidst ongoing market fluctuations triggered by the Trump administration's dynamic tariff plans. The average 30-year mortgage rate stood at 6.89% through Wednesday, a decrease from the previous week's 6.95%. Freddie Mac data indicates that 15-year mortgage rates dropped to 6.05% from 6.12%.
"Mortgage rates have remained stable over the past month, and economic indicators suggest continued stability," said Freddie Mac's Chief Economist, Sam Khater.
Market uncertainty surrounding the potential economic ramifications of tariff policies has led to a decline in Treasury yields, which typically influence mortgage rates. Data released this week showed decelerating growth in the services sector, further pushing yields down. However, the reduction in mortgage rates was comparatively modest.
Zillow's Senior Economist, Kara Ng, noted that investors appeared less concerned about the inflationary impact of tariffs and the potential impact on the Federal Reserve's rate-cutting plans.
"Markets focused more on the potential growth implications of tariffs and their effect on economic activity," Ng explained. "Treasury yields fell accordingly, but mortgage rates did not follow suit."
Experts anticipate continued volatility in mortgage rates as economic conditions and policy developments evolve. Mortgage application activity remained mixed, with refinancing applications increasing 12% weekly through Friday and applications for home purchases decreasing 4%, according to the Mortgage Bankers Association.
Upcoming economic data, such as the Friday release of employment figures and the following Wednesday's inflation readings, will provide further insight into the economy's health and the Fed's potential rate-cutting trajectory.