Following the Trump administration’s most recent tariff announcement, mortgage rates fell precipitously, providing some respite for purchasers. However, affordability is still a big worry because housing costs are still close to record highs.
Mortgage Rates Today: What’s Happening?
- The average 30-year mortgage rate dropped 12 basis points to 6.63%, the lowest since October.
- Following a sell-off in the stock market, the loss pushed investors into bonds and caused interest rates to drop.
- The 10-year U.S. Treasury yields, which also fell following the tariff news, are often followed by mortgage rates.
Will Lower Mortgage Rates Help Homebuyers?
Even with the dip in current mortgage rates, homeownership remains costly:
- The average U.S. home buyers monthly mortgage payment hit a record $2,802 for the second week in a row.
- Home sale prices increased 3.4% year over year, keeping affordability out of reach for many.
- A $400,000 home is out of reach for almost 70% of American households.
Reasons Why Affordability Is Still a Problem
- Home prices are rising; in 2025, the average price of a new home is $460,000.
- Limited supply of affordable housing: Although more properties are being offered for sale, they are not at lower price ranges.
- Economic worries: A number of homeowners are selling because they are afraid of changes in the market or because they are unsure of their jobs.
What’s Next for the Housing Market?
- More listings: March saw a 10% jump in new listings and a 28% increase in active listings year over year.
- Slower sales: Pending home sales fell 5.2% in major metro areas, with declines in Florida and Virginia.
- Market rebalancing: More price reductions suggest a shift towards a buyer’s market later in 2025.
With mortgage rates tariffs in play, the market’s future depends on economic stability and buyer confidence. If rates continue falling, home affordability could improve in late spring and early summer.
Source: CNBC
