Mortgage rates fell sharply on Thursday following the Trump administration’s tariff announcement.
According to Mortgage News Daily, the average rate for popular 30-year fixed loans plummeted to 6.63% to 12 basis points. It put it at its lowest level since October.
A massive stock market sale early on Thursday led investors to flee to the bond market. This has resulted in lower bond yields. Mortgage fees roughly follow the yield of 10 years US Treasuryand they have been moving in a very narrow range since late February.
“There remains a lot of uncertainty in the finer details of the Wednesday afternoon tariff announcement, but the market has been listening enough to affect global trade,” wrote Matthew Graham, chief operating officer of Mortgage News Daily.
With the historic busy spring season beginning with gear, lower rates are a good time for the housing market. However, there are several other factors working against buyers that can lash out at affordable prices.
For the four weeks ending March 30th, monthly payments for typical US home buyers reached record highs for the second consecutive week, reaching $2,802, according to real estate broker Redfin.
“Sales prices are up 3.4% year-on-year, with the average weekly mortgage rate of 6.65%, the lowest level since December, but exceeding the lows of the pandemic era, more than doubled,” the report said.
Even with the mortgage rates drop slightly on Thursday, about 70% of households, or 94 million people, cannot afford a $400,000 home. According to the National Association of Home Builders, the median estimated price of a new home is around $460,000 in 2025. This calculation was based on income thresholds and underwriting criteria.
The minimum income required to buy a $200,000 home with a mortgage rate of 6.5% is $61,487. In 2025, approximately 52.87 million households in the United States are estimated to have income, so they can afford to buy a home that is below that threshold and therefore costs up to $200,000.
The supply of homes on the market is increasing, but that supply is not the most demanded price. In other words, it is not at the bottom. It is also generally much lower historically due to the chronic shortage since the Great Recession.
“Supply is picked up. A lot of people I’ve spoken to over the last year or two years say they’re calling. “We believe we’re at the top of the market and they want to get the best dollars for their homes. Here in the DC area, we sell because we’re worried about losing government jobs or want to get closer to the city due to policies in our office.”
As for the previous spring season, there was a 10% jump per year on the new list in March, with the active list rising about 28% year-on-year, according to realtor.com. But it also found that the house has been sitting in the market for a long time, and the share of listings with price cuts is rising. Pending sales, a contract signed on existing homes, fell 5.2% in the country’s largest metropolitan area since last March.
Some of the sharpest declines were Jacksonville, Florida and Miami, Florida, which fell 15.1% to 13.7% respectively, but the market is softening by turning pandemic migration back on. Virginia Beach, Virginia, saw a 14.2% decline.
“The high cost of buying combined with rising economic concerns suggests a sluggish response from buyers in the early spring. We are looking at a market that offers shoppers more options,” wrote Danielle Hale, Chief Economist at Realtor.com, in a release. “Unless economic concerns are resolved and buyers are knocked out of the course, the recent improvements in mortgage rates have been on track, and in the second half of the spring and early housing season.”
