Homebuyers Are Pausing Again as Rates Hit 7.1%

Mortgage rates have jumped back above the 7 percent mark, and the ripple effect is hitting the housing market hard. After a brief spring bounce in buyer activity, the renewed spike in borrowing costs is putting that momentum on pause.

On Friday, the average 30-year fixed mortgage rate rose to 7.1 percent, its highest since February. The jump followed a sell-off in the bond market, which saw the 10-year Treasury yield leap to over 4.5 percent—the biggest weekly gain in nearly 25 years. When bond prices drop and yields rise, borrowing gets more expensive, and that’s exactly what we’re seeing play out.

This surge isn’t just a numbers game. It’s layered with real-world concerns, especially with the reintroduction of global tariffs. A new 10 percent blanket import tax, along with steeper tariffs for countries like China, has sent a wave of uncertainty through financial markets. Hedge funds unraveling risky bets only added fuel to the fire, forcing investors to dump long-term Treasuries and driving up yields—and mortgage rates—further.

That financial tension is translating into buyer hesitation. Redfin is already signaling that the recent demand surge won’t stick. And honestly, I get it. When you’re hearing words like “recession” and “tariffs” while touring open houses, it’s easy to worry about home values sliding or monthly payments rising even more.

Even some relief efforts—like the president’s decision to pause retaliatory tariffs for 90 days—haven’t eased concerns entirely. Shifts in trade policy, even temporary ones, don’t provide much comfort when you’re trying to lock in a mortgage.

I’d say buyers are tapping the brakes, not because they don’t want to own a home, but because they’re trying to make sense of what’s coming next. And in a market this shaky, caution might not be such a bad thing.

Source Inspiration: The Epoch Times.