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New Tariffs Trigger Mortgage Rate Volatility: 5 Critical Impacts for Real Estate Pros

April 10, 2025

April 10, 2025

By Pulse Market Economist | Market Data

Market Reacts Strongly to New Economic Policies

The administration's April 2nd announcement of reciprocal tariffs on 186 countries (10-125%) has triggered significant volatility in mortgage markets. After an initial beneficial drop, rates have reversed course dramatically. According to MCT's latest mortgage market update, current 30-year fixed rates are now fluctuating between 6.50-7.00%.

Action Step: Monitor rate fluctuations closely to help clients capitalize on temporary dips, but advise caution in timing decisions against unpredictable market conditions.

The data reveals a complex economic picture: Treasury yields initially dropped 21 basis points before rebounding and adding an additional 16 points, with mortgage rates following this pattern. This volatility comes as economists elevate recession probability forecasts to 40-50% during 2025, based on current financial indicators.

Mortgage Rate Volatility Chart - April 2025

Five Critical Impacts for Real Estate Professionals:

  • Rate sensitivity surge: Even slight rate drops trigger noticeable application increases

  • Loan diversity expansion: Non-QM, HELOC and second mortgage originations gaining traction

  • Delinquency concerns: 90+ day delinquencies increasing as borrowers struggle with rising property taxes and insurance

  • Limited refi potential: No refi boom expected despite occasional rate dips

  • MSR value stability: Mortgage Servicing Rights values remain resilient despite economic uncertainties

Financial markets continue assessing the broader implications of global economic and geopolitical shifts. According to MCT's market research team, "it is difficult to predict the direction of mortgage rates and other financial indices during such volatile conditions," creating both challenges and opportunities in the real estate sector.

Current Rate Snapshot (April 9, 2025):

30-Year Fixed
6.70%

10-Year Treasury
4.36%

Rate Trend (7-Day)
+0.16%

#tariffs #mortgagerates #marketvolatility #economicpolicy