Mortgage Rates Drop to 2025 Low, Driving Surge in Loan Applications

Economic uncertainty tied to new tariffs lowers Treasury yields, prompting a significant increase in mortgage demand for both purchases and refinancing.

• The average 30-year fixed mortgage rate fell to 6.73%, its lowest since December 2024, as reported by the Mortgage Bankers Association (MBA).
• Total mortgage application volume rose 20.4% last week, with refinancing applications jumping 37% and purchase applications increasing 12%.
• The decline in rates is linked to falling 10-year Treasury yields, which dropped from a January high of 4.8% to 4.2% last week, driven by investor concerns over new tariffs.
• President Trump and administration officials highlighted the reduced borrowing costs, with Trump calling the rate drop a 'big beautiful drop' during a recent address.
• While lower rates provide relief for borrowers, high home prices, limited inventory, and economic uncertainty continue to challenge the housing market.

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