Tariff-sparked turmoil is starting to show up in the housing market.
Mortgage applications for new home purchases and refinancings dropped sharply last week after stock and bond market volatility sent mortgage rates higher.
Applications to purchase a home fell 5% through Friday compared to a week earlier, according to the Mortgage Bankers Association. Refinancing applications dropped 12% in the same period.
“Purchase volume remains almost 13 percent above last year’s level, but economic uncertainty and the volatility in rates is likely to make at least some prospective buyers more hesitant to move forward with a purchase,” Mike Fratantoni, MBA’s chief economist, said in a statement.
Read more: Mortgage rates history — see how rates have changed over time
After a period of stability around 6.6%, average 30-year fixed mortgage rates jumped 20 basis points last week to 6.81%, according to the MBA. Mortgage rates followed 10-year Treasury yields higher after investors dumped stocks and bonds amid fears about President Trump’s tariff policies. Trump later delayed higher tariffs on some countries, citing concerns over the bond market’s reaction.
As of Tuesday, the average 30-year fixed mortgage rate was 6.88%, according to Mortgage News Daily.
As mortgage rates rose, more homebuyers opted for adjustable-rate mortgages, which carry initial rates closer to 6%. ARMs made up 9.6% of application activity last week, the highest level since November 2023, when average 30-year mortgage rates were north of 7%.
Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.
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