Wow! That is one of the words used to describe this week! Last week we saw some of the best rates in 2025 – actually in several months! Then Friday afternoon came along followed by this week. So what is going on?
Normally when we see the stock market drop quickly, we see the bond market improve. This week because of the unknown with the tariff’s, we saw both the stock market drop and the bond market worsen. Mortgage rates jumped every day this week, Wednesday was a bit calmer after Tuesday, but it’s still been a crazy week. Inflation numbers came in better than expected today, but it wasn’t enough to help mortgage rates. Tuesday we saw the bond market open up down 89 points, which means higher interest rates. By the end of the day Tuesday, the bond market had gained back most of what it lost.
So what is driving this? The Fed looks to the future when looking at rates. The concern is whether the tariffs will cause more inflation. No one knows for sure what will happen, but it’s speculation that we will see higher inflation and slower economic growth. The Fed was discussing this at the last meeting.
So what do you do if you are looking at buying a home? As we have been saying, home prices are expected to increase, maybe not a lot, but still increase. If rates do come down, there will be more multiple offers and that will make it harder to get the home you want.
The reality is if you find a home you want, work with your loan officer to get the best rate you can. Sometimes that means paying points to lower the rate, but look at how long it will take to recoup the cost of paying points too. It may not be worth it, especially if rates do come down and you refinance.
Right now we know the market is volatile and there is nothing we can do. I do know that I compared rates for a client that was looking last summer and the rate today was still better than it was last summer. Stay in touch with your loan officer and be informed. As I tell clients frequently, if we knew what was going to happen with interest rates, we would be sitting on a beach somewhere!! No one really knows and as we saw this week, rates can change quickly!
Leslie Vanderwerf, NMLS ID#335509, CrossCountry Mortgage LLC, An Equal Housing Lender, NMLS#3029 – Email – Website
