US mortgage rates surge by most in a year as tariffs hit markets

[WASHINGTON] Mortgage rates in the US rose for the first time in four weeks, posting the biggest weekly jump since April 2024.

The average for 30-year loans was 6.83 per cent, up from 6.62 per cent last week, Freddie Mac said in a statement.

Higher rates risk stifling sales during the typically busy spring market as broader economic uncertainty weighs on buyers. Tariff battles are roiling equity markets, pushing up the yield on US 10-year Treasuries that serve as a benchmark for mortgage rates.

“When it rises, mortgage rates typically follow suit,” said Jiayi Xu, a Realtor.com economist. “Looking forward, competing economic forces are pulling mortgage rates in opposite directions, making it increasingly difficult to predict where they’ll land.”

Demand is already starting to slow. In the four weeks through Apr 13, contracts were down 0.8 per cent from a year ago, according to real estate brokerage Redfin. 

“Consumers are feeling anxious about the economy and the rising cost of living, potentially leading them to adopt a ‘wait-and-see’ approach regarding significant purchases like homes,” said Kara Ng, senior economist at Zillow Home Loans.

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With the weakening demand outlook, some economists are cutting their forecasts for home-price growth this year. Mark Zandi, chief economist at Moody’s Analytics, now expects prices to rise 1.8 per cent this year, the slowest rate since 2011.

The impact of the trade war is already starting to hit the housing market. Homebuilders are expecting weaker demand in the next six months, and some companies are contending with higher costs from suppliers. On Thursday, home construction company DR Horton cut its sales outlook for its fiscal year.