Rates on the benchmark 30-year fixed mortgage have climbed above 7 percent amid tariff and bond market turbulence.
Mortgage rates topped 7 percent on April 11 amid a bond market selloff as markets absorbed the latest developments in U.S. trade policy and global responses.
The average rate on a 30-year fixed mortgage jumped by 13 basis points to 7.1 percent, the highest since February,
according to Mortgage News Daily.
Experts say the move up in mortgage rates is poised to reverberate through the housing market. After three consecutive weeks of
rate declines in March, mortgage applications briefly surged during the week that ended on April 4, with the Mortgage Bankers Association
reporting a 20 percent increase—the highest level since September 2024.
With rates climbing again, however, prospective homebuyers are growing more cautious, according to Redfin, which predicted on April 10 that the improvement in demand is “unlikely to last.”
“Tariffs are coming up for the first time. I hosted an open house over the weekend, and some of the younger buyers were concerned about how they’re going to impact the housing market,” Desiree Bourgeois, a Redfin Premier agent in Detroit, said in a
statement. “They’re hearing the words ‘tariffs’ and ‘recession,’ and it’s making them nervous that if they buy now, the value of their home will decline, and they don’t know whether mortgage rates will go up or down. There’s a lot of uncertainty out there, with buyers trying to understand how their purchase would fit into their personal finances and the broader economic puzzle.”
The spike tracks a rise in the 10-year Treasury yield, which climbed above 4.5 percent on April 11—its highest level in nearly two months—and by the time markets closed, it posted its largest weekly increase since 2001. Yields rise when bond prices fall, pushing borrowing costs higher across the board.
The bond market selloff was intensified by hedge fund activity, according to a Reuters
report. Large investors unwound so-called basis trades—a leveraged strategy that profits from small price differences between Treasury bonds and their corresponding futures contracts. As those bets unraveled, funds dumped long-term Treasuries in large volumes, accelerating the rise in yields—and putting upward pressure on mortgage rates.
Some analysts said the recent global tariffs have driven volatility in equity markets and have doubt on the safe-haven status of U.S. Treasuries.
“Investors around the world have viewed America as the best place to invest ... one of the ways that expresses itself is in lower yields,” Minneapolis Fed President Neel Kashkari told CNBC in an interview. “If investors decide, ‘Hey, we want to invest elsewhere’—all else equal—that ought to be pushing up yields.”
On April 2, President Donald Trump imposed a 10 percent blanket tariff on nearly all imports, plus steeper duties on 60 nations singled out for large trade imbalances. Although the president paused reciprocal tariffs on U.S. allies for 90 days, he raised levies on Chinese goods to a cumulative 145 percent.
China retaliated with its own 125 percent tariff on U.S. imports. Meanwhile, tariffs on vehicles, steel, and aluminum remain at 25 percent, and the blanket 10 percent import tax is still in effect.
Trump has said that the tariffs are a necessary reset of a global trade system that has long treated the United States unfairly, with the tariffs aimed at forcing foreign governments to strike fairer bilateral deals and facilitating the reshoring of manufacturing capacities. He recently noted that more than 75 countries had responded with diplomatic outreach and that
15 have submitted formal trade proposals that are now under review.
However, citing volatility in markets—including bonds—Trump on April 9 paused the reciprocal tariffs on most countries for 90 days, a move that drove markets into a relief rally.
