Staff Reporter
The effects of tariffs are beginning to manifest in the housing market. Mortgage applications for new home purchases and refinancings saw a significant decline last week, as volatility in the stock and bond markets pushed mortgage rates higher.
According to the Mortgage Bankers Association, applications for home purchases fell by 5% through Friday compared to the previous week. Refinancing applications dropped by 12% during the same period.
“While purchase volume remains nearly 13% above last year’s levels, economic uncertainty and fluctuating rates are likely to make some potential buyers more hesitant about moving forward,” stated Mike Fratantoni, chief economist at the MBA.
After a period of stability around 6.6%, average 30-year fixed mortgage rates surged by 20 basis points last week, reaching 6.81%, as reported by the MBA. This increase followed a rise in 10-year Treasury yields, driven by investor concerns over tariff policies.
As of Tuesday, the average 30-year fixed mortgage rate stood at 6.88%, according to Mortgage News Daily. With rising mortgage rates, more homebuyers are turning to adjustable-rate mortgages (ARMs), which offer initial rates closer to 6%.
Last week, ARMs accounted for 9.6% of application activity, the highest level since November 2023, when average 30-year mortgage rates exceeded 7%.
