President Trump’s tariff proposals have caused mortgage rates to fluctuate wildly between 6.5% and 7%. Housing experts warn that the direction of mortgage rates is uncertain due to various wildcards, including recession risks, inflation, and trade policies.
“The fact that [President Trump] has been very impulsive with his statements and actions has made mortgage rates somewhat directionless,” said Melissa Cohn, regional vice president at William Raveis Mortgage. The situation creates a dilemma for the Federal Reserve, which has paused interest rate cuts until there are evident signs of an economic slowdown.
If the economy slips into a recession, as many experts now foresee, mortgage rates could drop. However, declining investor confidence in the US economy could disrupt this pattern. Experts recommend that prospective homebuyers adjust to the “higher for longer” rate environment and consider strategies like building credit score, saving for a bigger down payment, shopping for mortgage lenders, and considering mortgage points.
While market forces are out of your control, there are ways to make buying a home slightly more affordable right now. Experts say that getting below 3% on a mortgage is unlikely without a severe economic downturn. Homeowners holding onto their mortgages may be waiting for cheaper rates, but some experts believe this won’t happen until the economy shows signs of slowing down.
Source: https://www.cnet.com/personal-finance/mortgages/mortgage-rate-predictions-heres-why-rates-could-rise-or-fall-in-april