Mortgage Rates Spike Amid Intensifying Trade War

HERUCLES, California — The ongoing trade war has caught the attention of springtime home shoppers, as mortgage rates jumped significantly this week. The average rate for a standard 30-year fixed mortgage rose to 6.83% in the week ending April 17, according to Freddie Mac. This increase marks the largest one-week rise in nearly a year.

After experiencing a steady decline in interest rates since March, many potential buyers began to enter the housing market as the prime homebuying season commenced. However, the recent tariffs imposed by the Trump administration have stirred up volatility within the bond market, leading to a sell-off in U.S. government bonds last week.

The 30-year fixed mortgage rates closely track the benchmark U.S. 10-year Treasury yield, which had recently spiked to as high as 4.5%. As of Thursday, that yield has eased slightly, settling around 4.3%.

Despite the uptick in mortgage rates, they remain lower than the previous year’s averages. Last year at this time, the average rate had reached 7.1%, while purchase application demand has increased by 13% now compared to then. “This suggests that this year’s spring homebuying season is off to a stronger start,” said Sam Khater, chief economist at Freddie Mac.

As homebuyers navigate these changing economic conditions, the potential impact of the ongoing trade tensions with China looms large, introducing more uncertainty into their financial decisions. The interplay between tariffs, interest rates, and consumer demand will continue to influence the real estate market as the season progresses.