How Trump’s Tariffs Will Change Mortgage Rates

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The real estate market is going through a period of volatility again. Mortgage rates are moving up and down quickly. The stock market is reacting to news. Treasury yields are shifting. For Realtors, this creates confusion for buyers and sellers.

This breaks down what is happening in simple terms so real estate agents can understand the current market and explain it clearly to clients.

What Is Happening With Mortgage Rates Right Now

Mortgage rates have been moving quickly. In recent days:

Mortgage rates were around 6.55 percent

They moved up to about 6.85 percent

The 10 year treasury yield jumped from around 3.8 percent to about 4.38 percent

This kind of movement is called market volatility. It means rates are not stable and can change fast based on news, fear, and investor behavior.

For Realtors, this matters because mortgage rates directly affect buyer affordability and monthly payments.

When rates go up, buyers can afford less home. When rates go down, buyers can afford more.

Why the Stock Market and Bonds Matter for Real Estate

Most people do not connect the stock market to real estate, but they are closely linked.

Here is how it works in simple terms:

When the stock market is unstable, investors often move money into safer investments like bonds

Bonds and treasury yields influence mortgage rates

When bond demand changes, mortgage rates move

Last week, rates dropped when investors reacted to market uncertainty. But shortly after, rates jumped back up when money moved out of bonds again.

This back and forth creates short term swings in mortgage rates.

For Realtors using AI tools or tracking real estate SEO trends, keywords like mortgage rate volatility, treasury yields, and housing affordability are becoming more important for content visibility.

A Look Back at COVID Market Volatility

To understand today’s market, it helps to look back at COVID in 2020.

At the beginning of COVID:

Mortgage rates were in the high 3 percent range

Markets became very unstable

Rates moved up and down quickly for several weeks

Then something important happened:

The Federal Reserve stepped in

The economy stabilized

Mortgage rates dropped to around 3 percent and stayed low for a long time

This created one of the strongest housing markets in history.

The lesson for Realtors is simple. Big volatility often comes before a major shift in rates.

What Is Likely to Happen Next

Right now, experts expect continued volatility in mortgage rates for the next several weeks.

There are a few key factors to watch:

Inflation reports

A major report called CPI (Consumer Price Index) comes out monthly. This shows how fast prices are rising.

If inflation is high, the Federal Reserve may keep rates higher longer

If inflation is lower, rate cuts could happen sooner

Federal Reserve decisions

Many expect possible rate cuts later this year. However, timing depends on inflation data and economic conditions.

Government debt refinancing

The government has a large amount of debt that needs to be refinanced this year. That puts pressure on interest rates and financial markets.

These factors combined create uncertainty in mortgage rates.

Why Rates May Eventually Come Down

Even with current volatility, there is a strong belief that mortgage rates will eventually move lower.

The key reason is inflation.

In simple terms:

Lower inflation usually leads to lower interest rates

Higher inflation keeps rates higher

Once inflation is under control, mortgage rates tend to stabilize and come down over time.

Another factor is economic slowdown. When the economy slows, rates often drop because demand for borrowing decreases.

What This Means for Realtors

If you are a real estate agent, here is what you will see in your business:

Buyers will hesitate

Some buyers will pause when rates spike. They will wait for better conditions.

Sellers will feel uncertain

Sellers may hesitate to list or may worry about timing the market.

Deals will take longer to close

Volatility creates slower decision making.

Price sensitivity will increase

Buyers are more focused on monthly payment than price alone.

This means Realtors must communicate clearly and stay calm when explaining the market.

How Realtors Should Talk to Clients Right Now

Here are simple talking points you can use with buyers and sellers:

Rates move up and down in the short term, but real estate is a long term investment

Waiting for the perfect rate often leads to paying more later

Market volatility is normal and expected during economic transitions

Home prices have historically increased over time despite short term rate changes

The goal is to help clients focus on long term decisions instead of short term fear.

The Big Picture for the Housing Market

Even with volatility, the long term housing trend remains strong.

Over the past several years:

Home prices have increased significantly

Inventory has stayed relatively tight in many markets

Demand for housing continues

Short term disruptions do not change long term housing needs.

People still need homes. Families still move. Life events still happen.

Final Thoughts for Realtors

The current market is uncertain, but it is not permanent.

Mortgage rates, stock markets, and treasury yields will continue to move in the short term. That will create confusion for buyers and sellers.

Your job as a Realtor is to bring clarity.

If you can explain what is happening in simple terms, you will build trust and win more clients.

Focus on:

Education over emotion

Long term perspective over short term fear

Clear communication over market noise

Volatile markets create opportunity for prepared agents.

Anthony Lamacchia: Tariffs, the stock market, mortgage rates, oh my god, what’s going on? Mortgage rates today are at an average of 6.85, as of right now. Let me give you the report. Mortgage rate 6.85, last Friday they were 6.55 when I talked to you all about how the treasury had gone down. As of this moment, stock market’s up 78 points, 10 minutes ago it was down.

Treasury yields, let me take a look at that. The 10-year treasury, hang on, hang on, 10-year treasury is at 4.387. Last week when I had done that video, when everything started, it was down to 3.8 or 3.6, let me take a quick look here. Obviously there’s a lot of volatility going on and I want to show you some graphs to talk about that and talk about some things that have happened in the past.

Let’s take a look back to five years ago when COVID hit and what exactly happened at that time. I remembered this yesterday and I wanted to show all of you. I asked to pull the graphs. There was a lot of volatility before rates came down in a sustainable manner. You can see right here in the graphs, 30-year fixed-rate mortgage, from Mortgage Daily News. Rates were in the high 3s. Then we got to middle of the winter 2020, the talk of COVID, COVID, COVID increased through that February. Rates were coming down initially, just like what happened last Friday.

Then all of a sudden things got to the point that it was like the bottom fell out and investors, not only they didn’t want to be in the stock market, normally investors put their money in the stock market, and then when stock market goes down, they pull their money out, they put it into bonds, they put it into treasuries, and what does that do? Lowers mortgage rates. That’s exactly what happened last Friday. Since last Friday, it’s like it hit the fan all over the place. The weekend happened, the overseas markets and investors said, I’m pulling out, I’m not going to the stock market, I’m not buying treasuries, bonds, none of that. What happened? Now rates went back up.

Same exact thing happened in the first about six weeks of when COVID officially hit. A lot of volatility, but by the end, by the time we got nearly to summer, rates were 3% and we all know what happened after that. Rates were 3, high 2s for about a year and a half. That is the thing that’s going to play out here in time. Even if you look at the stock market back at that time, you can see the same thing when the market started going down. If we could overlay these graphs, you’d see it followed a similar pattern. Market went down, down, then it leveled and came back up again, back into the, we’ll call it mid or high 20,000. What does this mean for right now?

What it means for right now is we’re going to deal with volatility for at least the next month. I actually think it may be longer. At that time, the Fed stepped in. There were a number of things that happened with the government where they stepped in and said, “We need to steady the ship.” I’m not really thinking that’s going to happen as much on this. However, at some point, the Fed is going to have to lower the short-term rates. When will they do that? Let’s see what happens tomorrow. Tomorrow, there’s a consumer price index report coming out, CPI. Comes out every month. If that comes out higher than expectations, the Fed’s going to have to hold their ground longer. If it comes in lower, that would give them reason to lower rates sooner.

Many people think that the Fed will lower short-term rates in late May or June. If that comes in light, maybe they’ll do it sooner because of the pressure. It’s pretty clear to me that this administration is obviously taking a much more aggressive stance on a number of things, but they’re also going after inflation much harder. Now, credit to the– I’m not trying to be political here, Biden’s administration tried to lower inflation as well and did have some impact on doing that over the last year. Trump’s administration came in, they want to be more aggressive.

I looked today, oil prices are down, lots of things are down. Some of that’s good because it relates directly to mortgage rates. I’m glad to see them aggressively tackling lowering inflation. I’ve said to many of you in many videos for the last, coming up on three years, I’ve said it this way, we will not see lower mortgage rates in a sustainable manner until they get inflation down.

Well, Trump’s administration knows that they’re going to have to get very aggressive about that happening. Also, I don’t know if you all realize this, the government has $9 trillion worth of debt that they have to refinance this year. $30 trillion, $28 trillion over the next 4 years, but 9 of it this year. They are looking ahead over the next six months saying, “Oh my God, we’ve got to get rates down at any cost.” Clearly they’re using tariffs as the tool to do that because they know that it’ll disrupt markets.

Now, I’ve said it before, I’ll say it again, nothing will lower rates in a more sustainable manner than an actual recession. It’s like going through a sickness to then get healthy again. I’ve said that all along. Trump’s team is clearly trying to slow things way down, but not totally hit the bottom. They call it a soft landing. Can they pull it off? I’m not convinced they can pull it off. Biden’s team was trying to do the same thing, but it was happening very, very slowly.

What’s right? I don’t know. I’ll let you all debate that. I am here to tell you that I’m very confident that when we get to the end of this disruption, six, eight weeks, we’ll start to see mortgage interest rates come down. Will it be that soon? Maybe not. The mortgage rates might hold until we get into fall or the end of the year. I think it might take a little longer than it did last time during COVID. I do feel very strongly that in the end, our whole economic system will be better off because of this disruption.

Hopefully I’m right. The question is how long? We’ll see. Bottom line, over the next four to six weeks, there’s going to be volatility. You realtors who are watching, which is most of my audience, you are going to have buyers that get nervous about buying, sellers that get nervous about selling and buying something else. You might want to remind those buyers, those buyers that pulled out of buying five years ago right now, how did they make out? They paid more when they got back in and some didn’t get back in. Home prices are 40% to 50% higher than they were then. We shall see. Stay tuned in to Crush It In Real Estate and my Instagram where I do shorter, more brief updates along the way. Thank you all.

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