Mortgage Demand Jumps as Rates Fall on Tariff Uncertainty

Mortgage demand is rising as borrowing costs fall, showing that the housing market may be seeing benefits from the economic impact of tariff proposals.

While President Donald Trump’s proposed import taxes have weighed on investor sentiment and sent markets lower, economists say the resulting economic uncertainty is also helping to lower home borrowing costs.

“Mortgage rates declined last week on souring consumer sentiment regarding the economy and increasing uncertainty over the impact of new tariffs levied on imported goods into the U.S.,” said Joel Kan, vice president and deputy chief economist at the Mortgage Bankers Association (MBA).

Rates Fall as Treasury Yields Move Lower

The 30-year fixed-rate mortgage for the week ending Feb. 28 came in at 6.73%, the lowest level since December, according to MBA data. The result has been increasing mortgage loan demand, with applications for purchases higher by 12% from the prior week and refinancing loan applications higher by 37%.

“This is a period where we typically see purchase activity ramp up and purchase applications were up over the week and continued to run ahead of last year’s pace, more green shoots as we head into the spring homebuying season,” Kan said. 

The decline in mortgage rates comes amid a decline in the 10-year Treasury yield, which has moved from its recent high of nearly 4.8% in mid-January to around 4.2% this week. Mortgage rates often move in tandem with the 10-year Treasury yield.