Specifically, the average interest rate on a 30-year fixed mortgage surged by 22 basis points on Monday and another 3 basis points on Tuesday, reaching 6.85%, according to Mortgage News Daily, completely reversing the decline from the previous week.
Just like the stock market, the bond market has been on a "rollercoaster" ride since last week, with mortgage rates following this uncertain path.
Last week, the 30-year fixed mortgage rate dropped to its lowest level since last October following President Donald Trump’s announcement of tariffs. The announcement caused the New York Stock Exchange to plummet, with investors flocking to the relative safety of the bond market. As a result, bond yields fell. Mortgage rates loosely track the yield on the 10-year Treasury bond.
"The drop from last week was a knee-jerk reaction that led to more dire economic expectations," said Matthew Graham, CEO of Mortgage News Daily. "The spring home-buying season is starting with more sellers and an increasing number of homes for sale," said Danielle Hale, chief economist at Realtor.com, adding, "But the high cost of buying, combined with rising economic concerns, suggests a subdued response from buyers in early spring."
It is worth noting, however, that the biggest drop in mortgage rates so far this year did not happen last week, but rather in January and February, when the 30-year fixed mortgage rate dropped from its high of 7.26% to 6.74%.
