• The 30-year fixed mortgage rate hit 7.1%, the highest since February, driven by bond market volatility and economic uncertainty.
  • Bond yields spiked sharply this week, marking their worst performance since 1981, as tariffs and inflation concerns shook markets.
  • Consumer confidence plummeted in April, with inflation expectations rising to 6.7%, further weakening housing demand.

The average 30-year fixed mortgage rate climbed 13 basis points to 7.1% on Friday, reaching its highest point since mid-February, according to Mortgage News Daily. This increase comes during an unpredictable week for markets and a turbulent economic climate.

Economic shifts are driving volatility. Earlier this week, bond yields spiked following the implementation of new tariffs by President Donald Trump on dozens of nations. Hours later, yields fell after Trump reduced tariff rates for most countries, though tariffs on Chinese imports remain at a staggering 145%.

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Impact of Bond Market Turbulence

Bonds resumed their selloff Friday, despite an inflation report that came in cooler than expected. Mortgage rates tend to follow the yield on the 10-year Treasury, which experienced its sharpest weekly spike since 1981. “Unless your career began before 1981, you just lived through the worst week for bond yields,” said Matthew Graham, COO at Mortgage News Daily.

This rollercoaster in the bond market coincides with the spring housing season, a critical time for real estate. For many, a home is the biggest investment they’ll ever make.

Consumer Confidence Hits a Low

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Adding to concerns, April’s consumer sentiment report showed a steep decline, with inflation expectations jumping from 5% to 6.7%, the highest level since 1981.

Nancy Lazar, chief global economist at Piper Sandler, shared her perspective on CNBC’s “The Exchange”: “With mortgage rates rising and growing fears about the job market, housing demand will remain weak.”

Have you noticed the impact of rising rates in your area? Share your thoughts below.

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