Why Have Mortgage Rates Surged? The Answer Is Murky, But Here’s What Experts Think.

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A dramatic and unexpected week for treasury yield and mortgage rates

It is difficult to predict mortgage rates, as they are determined by a complex interaction of various macroeconomic and industry factors. However, a special metric, the movement of a 10-year-old American Treasury yield, usually can be trusted as a direct precursor for agitation in fixed mortgage rates.

The stock market collapsed when President Trump unveiled the Stifer-to-Cowlvic Tariff on 2 April. And according to traditional market logic, the Bond Market carried forward in another way- the price of American Treasury increased and at least (Bond prices and yields run in opposite directions).

When 10-year-old treasury yield falls, the hostage rates also decrease. And this is what we saw for the first two days after Trump’s announcement, which happened on Wednesday afternoon.

But until next Monday, Treasury yield suddenly reversed courses. And they did not stop for five days. By the end of last week, a 10 -year -old treasury yield was hit by 47 basis points. This was the biggest weekly growth since the 2008 financial crisis.

This was a terrible news waiting for household poachers to lock the more affordable mortgage rate. Recently, in early March, the 30-year mortgage rate average average at a four-month low of 6.50%. But after 44 base points increased last week, Friday’s major mortgage average shot up to 7.14%. This was the biggest growth of Friday-to-Friday in almost three years.

How experts surprise the bond market

Several financial experts are scratching their heads about the dramatic turn of events for treasury yields, as the stock market continued through last Tuesday (before slow recovery on Wednesday). Bond prices started drowning at the same time that the stock market was still decreasing?

One theory is that investors predict tariff-trigger-triggers, more expensive consumer will push inflation through goods. If inflation increases, it may force the Federal Reserve to keep the interest rates high for a longer time. And this, in turn, locks in today’s treasury rates, which is less attractive – is reducing its price.

Another top theory is that foreign governments can retaliate by dumping their American bonds with Tram’s strict-to-introduced global tariffs. Or separate from vengeance, countries can choose to buy less new American bonds that move forward. In both cases, it can reduce American bond prices.

Currently, in all scenarios, the major theme is “uncertainty”. It is not clear which countries will retaliate, which will interact, and which tariffs can choose to withdraw or soften President Trump – and, as a result, how inflation and economic development will affect – market and Federal Reserve Limbo are waiting for more market clarity. Fed Next meets on 6–7 May, and at this time, the interest rate traders priced more than 80% of the possibility that the rates will be abandoned by central bankers where they are.

For hostage rates, they have seen some relief so far this week, a light drop with Monday, and Tuesday’s rates are still decreasing. But where they go from here, it is difficult to predict

How do we track the best mortgage rates

The above cited national and state average has been provided as has been done through Zillow Mortgage API, which consider an applicant credit score loan-from (LTV) ratio in 80% (ie, at least 20% down payment) and 680-739 range. The resulting rates indicate what borrowers should expect when receiving quotes from lenders based on their ability, which may vary from advertised teaser rates. © Zillow, Inc., 2025. Use zillow is subject to terms of use.