The average rate on the popular 30-year fixed mortgage surged 13 basis points Friday to 7.1%, according to Mortgage News Daily. That’s the highest rate since mid-February.
Mortgage rates have been on a roller coaster ride all week, as bond yields spiked higher mid-week when President Donald Trump’s new tariffs on dozens of countries went into effect. Yields dropped when Trump lowered the tariff rate on most countries hours later. Tariffs on Chinese imports, however, currently stand at 145%.
But bonds began selling off again Friday, despite a cooler-than-expected inflation report. Mortgage rates loosely follow the yield on the 10-year Treasury.
“There have been some bad weeks for bonds here and there over the careers of most anyone who’s alive to read these words, but unless your career began before 1981, you just lived through the worst week you’ve ever seen in terms of the jump in 10-year yields,” said Matthew Graham, chief operating officer at Mortgage News Daily.
Graham said there are two ways to look at where bonds are trading today: “This is either the end of the worst week for 10-year yields since 1981 or the end of a fairly average two weeks that fit right in with the trend of the past 18 months.”
On Friday, another monthly report on consumer sentiment came in substantially lower than expected. The expectation for inflation jumped from 5% in March to 6.7% in April, the highest level since 1981.
All of this comes right in the heart of the all-important spring housing market. For most consumers, a home is their single largest investment.
“Forget about housing in this environment, with mortgage rates back up, consumers certainly concerned about the job market, housing will also be on the weak side,” said Nancy Lazar, chief global economist at Piper Sandler,
