It was a wild, wild week, with stock and bond markets moving violently up and down in response to the Trump tariffs, China’s retaliation, and growing recession fears. But let’s bring it back to real estate, where the spring inventory increase is underway!

‘Liberation Day’ brought little joy to financial markets globally, with stock markets down big and recession risks (for the US and elsewhere) ratcheting higher. The silver lining for the real estate market is that 10-Year US Treasury Bond yields fell to near 4% on April 3, and that could see average mortgage rates drop to near 6.5%.

After several weeks of steadily improving mortgage rates, things hit a bit of a wall: tariff fears and realities, rising inflation expectations, hawkish Fed commentary, etc. Nonetheless, average 30-year mortgage rates remain well below 7%. This, together with higher inventory levels nationwide, is breathing some life back into the moribund housing market.

Economic uncertainty (higher tariffs, slower GDP growth, weaker stock market) is definitely rising. The good news is that despite the Fed keeping short-term interest rates on hold on March 19, mortgage rates are moving lower again.

After nearly two months of falling bond yields (and mortgage rates), trends reversed course this week, despite solid progress getting CPI lower and a BLS jobs report that was weak beneath the surface. The Fed is expected to keep rates steady next week.

Between the on-again-off-again tariffs, the weak ADP job growth in Feb 2025, and the Atlanta Fed’s GDPNow model calling for a contraction in 1Q 2025, there’s been a lot of bad news / uncertainty over the last week. But much of that was good news for mortgage rates.

Concerns about the impact of tariffs, the outlook for company earnings, and more have seen the stock market looking very shaky. The ‘risk-off’ trade has benefited bond prices, helping to send average mortgage rates back into the 6% range.

Builder confidence and housing starts plunged!? Not really. But tariff fears and rising affordability issues (mortgage rates, home prices, and insurance) are weighing on sentiment and sales.

The January CPI report was just what we DIDN’T need, with inflation rising on higher home rental, oil and food costs. Unless something changes, the Fed might not cut again for several months.

A crazy week for politics and the markets saw 30-yr mortgage rates drift closer to the 6s. The recent trends in inflation (PCE) were encouraging, but the BLS jobs report could set the tone for bond yields and mortgage rates over the coming weeks.

Mortgage rates have been trending lower lately, but not because of the typical drivers (lower inflation or higher unemployment). Instead, we have China and Colombia to thank.

The tamer December CPI report helped mortgage rates move lower. Meanwhile, the inventory of homes for sale continues to rise. Lower rates + more inventory? Let’s hope the trend continues as the spring selling season approaches!