A new round of taxes on imported goods has increased borrowing costs, linking global politics to your monthly payment.
The average rate on the 30-year fixed-rate mortgage rose 10 basis points, to 6.86%, in the week ending April 10, according to rates provided to NerdWallet by Zillow. A basis point is one one-hundredth of a percentage point. This marked the highest interest rate for the 30-year mortgage since the last week of January.
From a dip to a climb
This weekly figure is the average rate over five weekdays, from April 4 to April 10. When you look at what happened each of those five days, the journey was bumpy.
On April 2, President Trump announced a new round of tariffs — taxes on goods bought from foreign countries. Most or all of the costs of these tariffs would eventually be paid by consumers. That could mean higher inflation, and the prospect of rising inflation would normally cause interest rates to go up.
However, after investors reflected for a day, mortgage rates dipped slightly on April 4.
Then the market changed its mind over the weekend. The 30-year mortgage went up on Monday, April 7. It kept going up Tuesday through Thursday, April 8 to April 10. That pushed the weekly average higher.
Caution sign for foreign investors
Mortgage rates tend to go up and down with yields on the federal government’s debt. A major component of that debt, the 10-year Treasury note, fell immediately after the announcement of the tariffs, and then sprang higher after the weekend.
Some observers have floated the possibility that the rise in Treasury yields isn’t only a reaction to the prospect of higher inflation. The increase might partly be a reaction to a “less predictable, more antagonistic, and more isolated” trade policy, the Wall Street Journal’s chief economics commentator, Greg Ip, wrote in an April 10 column. “For foreign investors, that makes it less safe.”
Keep calm and stay in touch with your lender
If you’re shopping for a mortgage, these abrupt rate movements might rattle you. The rate outlook is murkier than usual. In your search for serenity, it helps to accept that you can’t control what the president does — or how those actions affect mortgage rates.
But you’re not powerless. You can pay attention to movements in mortgage rates, and work closely with a loan officer to decide when to lock in your rate.
“Because mortgage rates are likely going to bounce around, buyers should be sure to have their finances in order so they can be ready to jump on rates when they do drop,” said Lisa Sturtevant, chief economist for Bright MLS, a database of properties for sale in mid-Atlantic states.
A final bit of advice: Have compassion for your loan officer, who is trapped on the same wild ride that you’re on. When you ask whether you should lock or float your rate, it’s a scary question to answer. Your loan officer is prone to the same uncertainty as you.
The article Weekly Mortgage Rates Rise on Tariff Announcement originally appeared on NerdWallet.