{"id":14126,"date":"2025-04-25T19:11:15","date_gmt":"2025-04-25T19:11:15","guid":{"rendered":"https:\/\/finderica.com\/?p=14126"},"modified":"2025-04-25T19:11:15","modified_gmt":"2025-04-25T19:11:15","slug":"mortgage-rates-want-a-trade-deal-but-patience-might-be-needed","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=14126","title":{"rendered":"Mortgage Rates Want a Trade Deal, But Patience Might Be Needed"},"content":{"rendered":"
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If the last few days are any indication, mortgage rates want a trade deal.<\/p>\n

They don\u2019t like tariffs, trade wars, or any of the uncertainty that comes with them.<\/p>\n

Instead, they crave clarity so bonds can settle down and provide direction for the market.<\/p>\n

So if you\u2019re rooting for a lower mortgage rate anytime soon, you should also be rooting for a trade deal.<\/p>\n

And this week, there have finally been some positive signs on that front.<\/p>\n

The News on the Trade War Has Turned Positive<\/h2>\n

The latest news on the global trade war is positive, at least, if you believe the reporting.<\/p>\n

Per Axios<\/a>, Trump said \u201cChina called\u201d and that a trade deal was only \u201cweeks away.\u201d<\/p>\n

Sounds promising, but apparently China denied that and said the United States needs to make the first move.<\/p>\n

At the same time, it has been reported<\/a> that China has eased up on some tariffs, and is pondering exemptions on 131 product categories included on a list that has been circulating among some businesses and trade groups.<\/p>\n

The takeaway here, for now, is that we\u2019ve moved into a new phase of negotiation, or at least not a ratcheting up of reciprocal tariffs anymore.<\/p>\n

While it\u2019s all speculative and debated, the two countries are at least not making matters worse, which could be at least be considered a small victory.<\/p>\n

The 10-year bond yield, which correlates well with 30-year fixed mortgage rates, has been steadily dropping throughout the week.<\/p>\n

At last glance, it stood at roughly 4.25%, which is down from weekly highs around 4.45%.<\/p>\n

That has translated to slightly lower mortgage rates, with the 30-year falling from above 7% to closer to 6.875%.<\/p>\n

It\u2019s not a huge move lower, but it\u2019s going in the right direction again. And if nothing else, it\u2019s a psychological win to see a 6 instead of a 7.<\/p>\n

This is especially true right now, with the spring home buying season in full swing.<\/p>\n

The latest numbers out of the National Association of Realtors weren\u2019t great, with existing home sales down 5.9% in March from a month earlier (and 2.4% lower than a year ago).<\/p>\n

Had we not seen a slew of tariffs and a wider trade war, there\u2019s a decent chance those home sales figures would have been higher.<\/p>\n

NAR also noted<\/a> that the inventory of unsold existing homes increased a healthy 8.1% from the previous month to 1.33 million units as of the end of March.<\/p>\n

That\u2019s the equivalent of 4.0 months of supply at the current monthly sales pace, which is more or less pretty normal.<\/p>\n

So the housing market is becoming more balanced nationally, and you\u2019re seeing more sellers negotiate with buyers, lower their prices, offer seller concessions, etc.<\/p>\n

There Will Be Another Twist in the Tale<\/h2>\n

Thing is, I don\u2019t believe we\u2019ve seen the end of the trade war, or the hostilities involved.<\/p>\n

There\u2019s a very good chance the parties involved will get into again before we see light at the end of the tunnel.<\/p>\n

The same goes for attacks on Fed Chair Powell, whose job security was threatened before President Trump eventually took a softer stance and walked back his remarks.<\/p>\n

When it comes down to it, I expect this stuff to go on until at least the end of the second quarter.<\/p>\n

That means another two months of rhetoric, back and forths, and high levels of uncertainty and volatility.<\/p>\n

This will make it difficult for mortgage rates to rally much if at all, and they could see a retracement back to the 7s if things really unravel again.<\/p>\n

Ideally that doesn\u2019t happen, but chances are it will if the very recent past is any indication.<\/p>\n

If you\u2019re a prospective home buyer, you should pretty much bank on it just to be safe.<\/p>\n

And if you\u2019re on the edge of qualifying for a mortgage, perhaps input a higher mortgage rate to stay within budget.<\/p>\n

Or alternatively, enter a lower maximum purchase price when home shopping in case rates unexpectedly spike again.<\/p>\n

I\u2019m still optimistic that mortgage rates will fall later in the year, as my 2025 mortgage rate predictions indicate.<\/p>\n

But confidence can\u2019t be all that high given current events and the potential for some massive changes to the global trade picture.<\/p>\n

There\u2019s also the question of rising national debt and bond issuance that may accompany proposed tax cuts, which could happen<\/a> as soon as July 4th.<\/p>\n

That might be the next shoe to drop if and when we get through this trade debacle.<\/p>\n

But don\u2019t forget the economic data, which will continue to matter regardless.<\/p>\n

We have the PCE report next week, which is the Fed\u2019s preferred measure of inflation, followed by the monthly jobs report.<\/p>\n

Pay close attention to those two reports if you want a clue as to where mortgage rates may go next.<\/p>\n

Read on:<\/span> Watch Out for a Mortgage Rate That Ends in .875<\/p>\n

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\"Colin<\/div>\n
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Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 19 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on X for hot takes.<\/p>\n<\/div>\n<\/section>\n

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\"Colin<\/div>\n
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