Tariffs Might Push Mortgage Rates Lower — But Will It Actually Help Homebuyers?
- Neil Caron
- Apr 10
- 3 min read
President Trump’s newly announced tariffs shook the markets this week, sending the 10-year Treasury yield down to its lowest point since last fall — a signal that mortgage rates may be heading lower in the short term.
For hopeful homebuyers, this might sound like good news. But as with most things in housing, it’s a mixed bag.
“When markets get uneasy, we tend to see mortgage rates come down,” says Neil Caron, Retail Lending Manager at CMG Mortgage. “But it’s not always a green light for buyers — inflation, inventory, and affordability still paint a complex picture.”
Since the president returned to office, investor confidence has wavered. That’s pushed more money into U.S. government bonds, which are considered safer in times of economic uncertainty. As a result, the 10-year Treasury yield has dropped significantly — down from 4.62% on Inauguration Day to around 4.03% today, following the tariff announcement.
Because mortgage rates are closely tied to that yield, the shift could spell lower borrowing costs.
Are Mortgage Rates Really Dropping?
Historically, 30-year fixed mortgage rates tend to run about 1.7 to 2 percentage points above the 10-year yield. Lately, that gap has widened, but we’re already seeing movement. According to Bankrate, the average 30-year fixed rate slipped to 6.67% in early April, down from this year’s average of 6.92%.
📌 RSL Piggy Points:
Mortgage rates often fall when investor confidence dips — and that’s exactly what tariffs tend to trigger.
Lower rates can open the door for new buyers or refinancing opportunities for existing homeowners.
ReadySetLoan tracks rate trends closely to keep you informed and prepared.
“Even a slight drop in mortgage rates can make a big difference for buyers on the fence,” says Caron. “But it’s not just about rates — the bigger story is about what’s driving the change.”
So far in 2025, the housing market has seen a modest rebound. The Mortgage Bankers Association recently reported the highest volume of purchase loan applications since January, signaling renewed buyer activity.
Inflation Risks Could Undercut Gains
The tricky part? Tariffs may lower mortgage rates, but they also tend to raise the price of goods and materials, which could make it harder to afford a home.
The Consumer Price Index shows inflation holding at 2.8% — with shelter costs still high. And according to a recent study from real estate data firm Cotality, existing tariffs have already pushed new-home construction costs up by 4% to 6%. With new homes now making up nearly half of the available inventory, that inflationary pressure is hitting where it hurts.
“It’s like a tug of war,” Caron explains. “You get lower rates, but then construction costs rise. That adds stress to affordability, especially for first-time buyers.”
The numbers back it up: Buyers now need to earn nearly $117,000 per year to afford a typical home in the U.S., according to Bankrate. The national median home price? A steep $398,400 as of February — up 3.8% from the year before.
Navigating Uncertainty: Buyers Beware — or Be Ready
How will tariffs play out in the long run? That remains to be seen. If economic conditions worsen, job growth could slow, making buyers more cautious.
“Buying a home is all about financial confidence,” Caron notes. “If buyers are worried about job security or rising costs, they may decide to wait — even if rates drop.”
But uncertainty also creates opportunity. For homeowners who locked in rates at or near 7% over the past couple of years, refinancing could be back on the table. And if demand softens and more inventory comes online, savvy buyers could be in a better position to negotiate.
📌 RSL Piggy Points:
Lower rates = potential for refinancing savings or greater affordability.
Tariffs could slow the economy, possibly increasing housing supply.
ReadySetLoan helps buyers stay prepared — even in shifting markets.
“Every market has a window,” Caron says. “This one’s a little cloudy, but that doesn’t mean the door’s closed. You’ve just got to be ready to move when the moment’s right.”
RSL Perspective: Smart Moves in a Shifting Market
At ReadySetLoan, we understand that headlines can stir up uncertainty — but they also shine a light on opportunity. Lower mortgage rates sound exciting, but they’re only part of the bigger picture.
Tariffs may stir inflation, drive up construction costs, or limit supply. But they may also create breathing room in rates and encourage sellers to re-enter the market.
That’s why ReadySetLoan exists — not as a lender, but as your expert guide through the race to homeownership.
➡️ Whether you’re watching rates, exploring refinancing, or considering a move, lean on ReadySetLoan as your trusted resource and educational partner. We’re here to help you make confident, informed decisions every step of the way.
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