This week, 30-year mortgage rates experienced a slight decrease of two basis points, settling at 6.87%.
However, housing experts indicate that further significant reductions may be challenging if market volatility persists.
On the last day of Freddie Mac’s weekly mortgage rate survey, which was Wednesday, 10-year Treasury yields — typically aligned with mortgage rates — surged following the release of Consumer Price Index data revealing increased inflation in January, well above the Federal Reserve’s target of 2%, which has dampened expectations for lower interest rates.
The following day, yields decreased by about the same margin after President Donald Trump announced reciprocal tariffs on US imports but stated that they would not be implemented right away. Such market fluctuations have become more frequent in response to Trump’s rapidly changing tariff announcements.
These volatile times often balance out for mortgage rates, keeping them confined within a narrow span just below 6.9% and just above 7% throughout 2025 thus far.
“In light of various potential outcomes and ongoing uncertainties, market dynamics are currently the primary influence causing weekly fluctuations in mortgage rates,” explained Zillow senior economist Kara Ng.
If you have inquiries about buying, owning, or selling a house, feel free to send your question to Yahoo’s panel of Realtors through this Google form.
While mortgage rates are not directly governed by the Federal Reserve, they generally shift in anticipation of changes in benchmark interest rates. Given the latest inflation figures, traders are revising their expectations for additional Fed cuts and perceive low chances of a rate drop before September.
“It is improbable that mortgage rates will decline significantly in the near future, as investors in debt markets seek higher returns in response to diminished purchasing power, and the Federal Reserve seems unlikely to reduce interest rates,” stated Realtor.com senior economist Joel Berner. “The era of sub-4% mortgage rates has ended, and if inflation persists, such rates may remain out of reach for an extended period.”
Learn more: 2025 housing market: Is now the right time to buy a house?
Claire Boston serves as a senior reporter for Yahoo Finance, focusing on housing, mortgages, and home insurance.
Explore real estate and housing market news, reports, and analyses to guide your investment decisions
Stay updated with the latest financial and business news from Yahoo Finance
