A wild, negative week for mortgage rates.

Friday, April 11, 2025

Happy Friday from Local Mortgage!

A wild week for mortgage rates and not a very good one for mortgage markets as rates skyrocketed on tariff news. We moved up a whopping 75 bps, putting us at 6.75% for most 30 year fixed conventional scenarios.

Most market analysts are still somewhat puzzled by the enormous selloff of bonds and the sharp increase in treasury yields. In a typical market, reasons are clearer as you can see the flow of money to equities, from bonds in times of growth and vice versa when investors are fleeing to safer assets.

Some of the theories for the massive selloff include investor concerns over tariffs impact on inflation, the selling of US bonds by foreign countries including China as a retaliatory measure and investment firms having to sell treasuries bonds to cover margin calls. This week’s selloff was sharp and severe with Wednesday’s announcement of a 90 day delay providing the only rally of the week, however, it was short lived as the selloff continued Thursday and Friday.

The bit of economic data we received this week should have been overall good for the economy and mortgage rates. The Consumer Price Index or CPI, which is one of the most widely watched inflation indicators, showed improvement, beating expectations and coming in at the lowest level since March of 2021. The March Producer Price Index or PPI was also well below expected levels, down 0.1% against a forecast of a .3% increase.

Next week, tariff news will still be in the spotlight and will be he main influence to mortgage markets. For economic reports, Retail Sales data will be out Wednesday, with Housing Starts on Thursday.  Markets will close early Thursday and all day Friday in observance of Good Friday.

Hope Everyone has a Great Weekend and thank you for reading.