What happened to mortgage rates this week
The Freddie Mac rate on a 30-year mortgage remained elevated this week, easing just 2 basis points to 6.81% as recent volatility continued to trickle through the market. The 10-year treasury yield saw considerable movement over the last week as markets reacted to changing tariff plans and the president’s statements around Fed Chair Jerome Powell. The recent back and forth on tariffs and other economic policy has led to market turmoil and a general sense of unease, which can be felt in stubbornly high mortgage rates. Consumers echo this sentiment with nearly one-third citing concern over losing their job over the next year in the most recent Fannie Mae Home Purchase Sentiment Index release.
What it means for the housing market
Zooming in on just the housing market reveals a few signs of progress, as the spring buying season gets underway. New home sales saw a surprising uptick in March, jumping 7.4% month over month and 6% year over year, led by affordably priced homes. This unexpected result shows that builders are adjusting inventory to attract buyers, and home shoppers are eager to take advantage of low-priced options, even amid high borrowing costs. Despite new home sales progress, existing home sales fell in March, trailing 5.9% behind February and 2.4% behind March 2024.
For-sale inventory continues to climb higher compared to last year, offering buyers significantly more options than a year ago. Affordability remains a challenge as mortgage rates hover near 7% and home prices have not budged significantly. However, price reductions reached their highest share for any March this year (back to at least 2016), suggesting sellers are managing today’s well-supplied market with more flexibility.