Rates Sink, Costs Climb: The Double-Edged Sword Facing Spring Homebuyers

Mortgage rates dropped due to the Trump administration's tariff announcement, but housing affordability remains a challenge. Supply is growing, but not at the most needed price points.

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​Following the Trump administration's recent tariff announcement, mortgage rates experienced a notable decline. On Thursday, the average 30-year fixed mortgage rate dropped to 6.63%, down from 6.75% the previous day, marking the lowest level since October 2024, according to Mortgage News Daily .​

This decrease was primarily driven by a significant sell-off in the stock market, prompting investors to seek the relative safety of the bond market. As demand for bonds increased, yields fell, leading to lower mortgage rates, which closely follow the yield on the 10-year U.S. Treasury .​

While the drop in mortgage rates offers a potential reprieve for prospective homebuyers, housing affordability remains a significant challenge. Factors such as rising home prices and limited inventory, especially in lower-priced segments, continue to impact buyers. Additionally, if tariffs lead to sustained inflation, mortgage rates could rise again, offsetting recent gains .

Mortgage News Daily provides daily updates on mortgage rates and offers tools for tracking rate changes. Their platform is a valuable resource for those seeking reliable loan quotes and insights into market trends .