Mortgage Rates Hit 7.1% As Bond Market Volatility, Trade Tariffs Shake Markets

Mortgage rates spiked to their highest level in nearly two months, with the average 30-year fixed climbing to 7.1% on Friday, according to Mortgage News Daily. The sharp increase — 13 basis points in a single day — wrapped up one of the most turbulent weeks for bonds in decades.

What To Know: The surge followed a string of economic surprises, including newly introduced trade tariffs and conflicting signals from recent inflation data.

Midweek, rates began rising after former President Donald Trump imposed widespread tariffs. Though many were later scaled back, levies on Chinese goods remained steep at 145%.

Even as inflation came in softer than anticipated, bond yields continued to rise, sending mortgage rates even higher. Matthew Graham, COO of Mortgage News Daily, told CNBC that this past week could be viewed as either an outlier or a continuation of a long-running trend in rate volatility.

"Unless your career began before 1981, you just lived through the worst week you've ever seen in terms of the jump in 10-year yields," he said.

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The timing is tough for the housing market, which typically sees heightened activity in the spring. Affordability, already strained, could worsen with borrowing costs on the rise.

"Forget about housing in this environment," said Nancy Lazar, chief global economist at Piper Sandler, in an interview with CNBC. She cited both higher mortgage rates and growing consumer anxiety around the job market as key challenges.

The University of Michigan’s latest consumer sentiment report added to the unease Friday, showing inflation expectations climbing to 6.7% — the highest since 1981.

Meanwhile, broader financial markets rebounded sharply Friday afternoon. Investors welcomed strong bank earnings and milder inflation data, helping lift major indexes despite ongoing tariff tensions. Treasury yields retreated slightly, with the 30-year falling to 4.90%.

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