Mortgage rates have dropped sharply, reaching a record low of 6.63% for the popular 30-year fixed loan, according to data from Mortgage News Daily. The decline follows the Trump administration’s tariff announcement, which sent investors fleeing to the bond market and causing bond yields to drop.
The decrease in mortgage rates comes as the spring housing season is kicking into gear, but it also presents a challenge for homebuyers who are already facing high monthly payments. According to Redfin, the typical US homebuyer’s monthly payment reached a record $2,802 last week, marking the second consecutive week at this level.
Experts warn that while mortgage rates have dropped, many households still cannot afford homes priced above $200,000. In fact, only 30% of households can afford homes in their area due to income thresholds and underwriting standards.
Despite a growing supply of homes coming onto the market, prices remain high due to chronic underbuilding since the Great Recession. Some experts believe the market is at its peak and expect prices to continue to rise.
In March, new listings increased by 10% annually, with active listings up roughly 28%. However, pending sales fell 5.2% from last year in major metropolitan areas, indicating a sluggish response from buyers.
As the housing market continues to navigate uncertainty, experts say recent improvements in mortgage rates could lead to a stronger later spring and early-summer season if economic concerns settle.
Source: https://www.cnbc.com/2025/04/03/mortgage-rates-tumble-tariffs.html