The average rate for the popular 30-year fixed mortgage was surged to 7.1% on Friday, from 13 basis points, according to Mortgage News Daily. This is the highest rate since mid-February.
When President Donald Trump’s new tariffs came into effect in dozens of countries, mortgage rates were on a roller coaster for a week as bond yields surged mid-week. Yet yields fell when Trump lowered tariff rates in most countries a few hours later. However, tariffs on Chinese imports are currently 145%.
However, the bonds began to be sold again on Friday despite a cooler inflation report than expected. Mortgage fees roughly follow the 10-year Treasury yield.
“There have been bad weeks here and there due to bonds, beyond the careers of most people living to read these words, but unless your career started before 1981, you’ve had the worst week you’ve seen in terms of jumping with a 10-year yield.”
Graham said there are two ways to see where bonds trade today. “This is the end of the worst week of 10-year yields since 1981, or a rather average end of two weeks that fits trends over the past 18 months.”
On Friday, another monthly report on consumer sentiment was significantly lower than expected. Expectations for inflation jumped from 5% in March to 6.7% in April, at its highest level since 1981.
All of these are at the heart of the very important spring housing market. For most consumers, homes are their biggest investment.
“Forgetting housing in this environment, mortgage rates will come back, consumers will certainly be worried about the job market and housing will be on the weak side,” said Nancy Lazar, chief global economist at Piper Sandler, about CNBC’s “The Exchange” on Friday.
