Mortgage Rates Fall to Lowest Since October—Here’s What You Should Know
Mortgage rates took a sharp dip this week, reaching their lowest point since October 2024, and it could be great news if you’re in the market to buy a home.
On Thursday, mortgage rates dropped dramatically following the Trump administration’s new tariff announcement. According to CNBC, the average rate on a 30-year fixed mortgage fell 12 basis points to 6.63%, down from 7.07% on the same day last year. That’s a meaningful shift, and it’s already creating ripple effects in the housing market.
Why Did Mortgage Rates Drop?
The sharp decline in rates is largely tied to investor behavior. After the tariff news broke, investors sold off stocks and moved their capital into U.S. Treasuries—a common reaction during uncertain economic periods. Since mortgage rates are closely linked to the yield on the 10-year Treasury, this shift caused mortgage rates to fall in response.
As of today, the 10-year Treasury yield sits at 4.05%, with a “spread” of 258 basis points between it and the average mortgage rate. For context, this spread (the difference between the two rates) typically hovers around 1.7 to 1.8 percentage points. A wider spread like this can signal market uncertainty or decreased investor appetite for mortgage-backed securities.
What Does This Mean for You?
In short: opportunity. With mortgage rates falling and the market in flux, buyers who act now could secure more favorable financing terms.
While rates are trending downward, the market remains unpredictable. Economic factors like prolonged inflation and future Fed policy could just as easily push rates back up. On the other hand, slower economic growth and global uncertainty may keep them lower.
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