As the landscape for international trade shifts, United States home buyers may indeed be experiencing the consequences of the trade. An even more significant jump was recorded in the average rate for a 30-year fixed mortgage, data released Thursday by mortgage financier Freddie Mac showed. This week increased to 6.83% from 6.62% recorded a week earlier on 17 April 2025.
It marks the most significant weekly mortgage rate increase in about a year. Average home loan interest rates had been declining since March, a potential driver that may have drawn some into the housing market with the spring homebuying season starting. However, high stakes on tariffs and a shifting trade mix with China have injected some volatility that eventually resulted in a US bond sell-off last week.
The benchmark US 10-year Treasury yield determines the direction of mortgage rates. It had increased considerably, peaking near 4.5% the prior Wednesday. Since then, it had ticked back to roughly around 4.3 percent when the bell rang on Thursday.
Although this amount is higher than last week’s, their previous 7% performance was against theirs in 2020.
What the market is reacting to is the Trade Landscape.
By the time mortgage rates had a gain last week, they had only fallen back to sizeable losses that were able to be placed in the broader mood and clearly should be related to a trend against international commerce. Bond market uncertainty may increase as this local issue of tariff imposition and its possible extension may have national ramifications. And that uncertainty can lead Treasury yields to swing, which will, in turn, transmit to the broader economy via estimates of the cost of borrowing for a variety of financial instruments (such as mortgages). The connections between global trade, financial markets, and U.S. economic fundamentals mean that news about international trade can have tangible effects on the residential housing market.
A History of Mortgage Rates — From 1985 To 2024
While this week is the most significant increase thus far, mortgage rates also need to be put in context in the Big Picture. Sam Khater, Freddie Mac’s chief economist, describes February as ”The progression of rates fell in the early part of this year compared with this time last year when rates hit 7.1% for an annual price and purchase application demand was -13% from today, suggesting a stronger start to this year’s spring homebuying season.”
What This Could Mean for Buyers Moving Forward
For home buyers, playing out of the mortgage rates could serve multiple purposes. The more expensive cost of borrowing makes it less accessible, which may influence the amount potential buyers can borrow (financing). That could swerve buying power and, by extension, the price point, if not ready suburbs homes nestle themselves away from the counter-cyclic habits of market groups — But as the headline print goes, as Freddie Mac was able to point out with respect to purchasing application demand, underlying desire to buy a home still appears to be extremely solid, which suggests some other grade/qualities in the biz were compensating a few of the damage coming from slightly larger prices.
Other Key Insights
Mortgage rates will, of course, be dependent on a number of factors in the weeks and months ahead: the state of international trade, the state of the economy, and the Federal Reserve. Further escalation of trade tensions that drive bond market volatility could also create higher mortgage rates. Inverting this scenario could also deliver its required impact, which would further offset the borrowing cost pressure as economic conditions appear to U-turn and head north or if the monetary policy skews on the bottom, such that smoothing helps to anti-praise in costs. Market participants will be watching these various forces closely in the following weeks, as they may influence mortgage rates and play a key role in the future of the housing market.
