M
arket turmoil has taken center stage, with the 30-year fixed-rate mortgage experiencing its largest single-day surge of 2025 on Monday. The rate jumped from 6.60% to 6.82%, a move that caught many off guard, especially given the recent dip in rates. This sudden increase is largely attributed to investors' growing unease about navigating an escalating trade war.

    As stocks continued to slide on Monday, bond purchases picked up pace, typically leading to lower mortgage rates. However, this time around, the opposite occurred. The stock market's early morning surge on Tuesday failed to sustain momentum, and mortgage rates crept higher, reaching 6.85%.

    The latest rate hike follows a five-month low just three days prior, leaving many in the real estate industry wondering what's next. MND Chief Operating Officer Matthew Graham notes that speculation surrounding new tariffs is putting pressure on the bond market.

    With President Trump's 10% baseline tariffs already in place and higher rates set to take effect soon, investors are bracing for a bumpy ride ahead. Real estate economists predict a rollercoaster of ups and downs during the spring buying season, with rates potentially dropping as the economy slows but rising if tariffs fuel inflation.

    The Federal Reserve's next move will be crucial in determining the fate of mortgage rates. Chen Zhao, Redfin's economics lead, suggests that investors are increasingly concerned about stagflation – a period of weak economic growth and high rates/inflation – rather than a recession. The Fed's decision will depend on assessing whether higher tariffs lead to persistent inflation or short-lived price increases.