WASHINGTON–President Trump’s new tariffs have played a role in driving down mortgage rates. Over two days last week the 30-year fixed-rate mortgage average declined 20 basis points over two days.
By Friday, the average rate had declined to 6.55%.
The reason: investors have been pouring funds into the 10-year Treasury note, which is seen as a risk-free asset. That, in turn, has pushed down10-year yields and, because they move in tandem, also pushed down mortgage rates.
bringing the 30-year fixed-rate mortgage down, because both move in tandem.
Chen Zhao, the economics research lead at real-estate brokerage Redfin, wrote in a note published on Friday that she expected mortgage rates to come down, at least temporarily.
She noted that while Friday’s jobs report was stronger than expected, investors would see that data as “old news…because the fallout from Trump’s April 2 tariff announcement is much more significant.”
‘Time to Buy?’
Some are urging buyers to take advantage of the decline. Vishal Garg, the CEO of Better, an online mortgage lender, called the downward move in the 30-year mortgage rate “one of the most significant weekly declines we’ve seen in a while, and it’s a window of opportunity for anyone actively in the market.”
The decline in rates comes at the same time payments for hit an all-time high. As the CU Daily reported here, the typical U.S. homebuyer’s monthly housing payment hit an all-time high of $2,807 during the four weeks ending March 23, up 5.3% from a year earlier, according to new data from Redfin.
Unaffordable for 94 Million People
CNBC reported in its analysis that even with a slight drop in mortgage rates, roughly 70% of households, or 94 million, cannot afford a $400,000 home; the estimated median price of a new home is around $460,000 in 2025, according to the National Association of Home Builders.
The minimum income required to purchase a $200,000 home at the mortgage rate of 6.5% is $61,487, according to the report cited by MSNBC.
“.In 2025, about 52.87 million households in the U.S. are estimated to have incomes no more than that threshold and, therefore, can only afford to buy homes priced up to $200,000,” the report added.
