Mortgage rates shot higher this week

Rates are a victim of economic uncertainty and a weak bond market

By Mark Huffman of ConsumerAffairs

April 17, 2025

Key takeaways:

• Mortgage rates rise with bond market volatility: Mortgage rates increased significantly this week, with the 30-year fixed-rate mortgage climbing from 6.62% to 6.83%. This sharp jump is attributed to turmoil in the bond market driven by broader economic uncertainty, particularly concerns over tariffs and weakening demand for U.S. Treasuries.
• Economic uncertainty make the difference:Typically, bond markets act as a safe haven during stock market volatility. However, recent synchronized movement between bonds and stocks, along with international market outperformance, indicates diminished investor confidence in the U.S. economy and equity markets.
• Homebuying demand still resilient:Despite the rate increase, mortgage rates have remained below 7% for 13 consecutive weeks. Compared to last year, homebuying demand is 13% higher, suggesting a relatively strong start to the 2025 spring homebuying season.

Economic turmoil caused by uncertainty over tariffs has reversed mortgage rates downward trend.

Freddie Mac reports its Primary Mortgage Market Survey shows the 30-year fixed-rate mortgage (FRM) averaged 6.83%, up from 6.62% the previous week, a significant one-week rise.

The 30-year fixed-rate mortgage ticked up but remains below the 7% threshold for the thirteenth consecutive week, said Sam Khater, Freddie Macs chief economist, in a statement. At this time last year, rates reached 7.1% while purchase application demand was 13% lower than it is today, a clear sign that this years spring homebuying season is off to a stronger start.

Whats behind the sudden surge? Marcus Sturdivant Sr., is a financial advisor in Charlotte, N.C. He notes that mortgage rates are keyed to the yield on the 10-year Treasury bond, which rose sharply this week.

When there are fewer buyers of U.S. Treasuries, the government has to offer a higher interest rate, or yield. Thats whats happening now. And thats problematic for people who want to take out a mortgage to buy a home.

The shakiness of the bond market and the extreme volatility last week show a sense of an economy that was running off and, in some cases, through the guardrails, Sturduvant told ConsumerAffairs.

Bonds usually offer protection when the stock market is down and violate, but it was trading in sync (with stocks), which hurt 60/40 portfolios. The international outperformance also shows a growing lack of certainty in the American economy and equity market.

New Rates

The 30-year FRM averaged 6.83% as of April 17, 2025, up from last week when it averaged 6.62%. A year ago at this time, the 30-year FRM averaged 7.1%.

The 15-year FRM averaged 6.03%, up from last week when it averaged 5.82%. A year ago at this time, the 15-year FRM averaged 6.39%.

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