Mortgage rates rise to two-month high due to Trump's tariffs

Mortgage rates rise to two-month high due to Trump's tariffs

Spring homebuyers could feel the effects of an intensifying trade war. According to mortgage financing provider Freddie Mac, the average interest rate on a conventional 30-year fixed-rate mortgage was 6.83% for the week ended April 17, up from 6.62% the previous week. This represents the largest weekly increase in mortgage rates in nearly a year.

Rising mortgage interest rates are affecting the housing market

Home loan interest rates had fallen steadily since March, which may have encouraged some potential buyers to enter the market as the peak home buying season begins. President Donald Trump unpredictable approach However, tariffs and an escalating trade war with China have led to volatility in the stock market and triggered selling pressure on U.S. Treasury bonds last week.

Impact on US government bonds

Mortgage rates are based on 10-year US Treasury yields, which reached as high as 4.5% last week. increased was. Since then, the yield has fallen slightly and stands at around 4.3% on Thursday.

Year-over-year comparison of mortgage interest rates

However, despite the current increase, the average interest rate for a 30-year fixed-rate mortgage remains below the 7% level reached in the same period last year. "At this time last year, interest rates were 7.1%, while demand for purchase applications was 13% lower than today. This is a clear sign that the spring home buying season is off to a stronger start this year," said Sam Khater, chief economist at Freddie Mac.