Why Have Mortgage Rates Surged? The Answer Is Murky, But Here’s What Experts Think.

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A Dramatic and Unexpected Week for Treasury Yields and Mortgage Rates

Mortgage rates are notoriously difficult to predict, as they’re determined by a complex interaction of various macroeconomic and industry factors. However, the movement of one particular metric, the 10-year U.S. Treasury yield, can generally be relied on as a direct precursor to movement in fixed mortgage rates.

When President Trump unveiled stiffer-than-expected global tariffs on April 2, the stock market plunged. And per conventional market logic, the bond market moved the other way—sending U.S. Treasury prices higher and yields lower (bond prices and yields move in opposite directions).

When the 10-year Treasury yield falls, mortgage rates typically decline as well. And that’s what we saw for the first two days after Trump’s announcement, which occurred on a Wednesday afternoon.

But by the following Monday, Treasury yields abruptly reversed course. And they didn’t stop for five days. By the end of last week, the 10-year Treasury yield had surged an eye-popping 47 basis points. It was the biggest weekly increase since the financial crisis of 2008.

This was terrible news for house hunters waiting to lock in a more affordable mortgage rate. As recently as early March, the 30-year mortgage rate average clocked in at a four-month low of 6.50%. But after rising 44 basis points last week, Friday’s flagship mortgage average had shot up to 7.14%. It was the largest Friday-to-Friday increase in almost three years.

How Experts Explain the Bond Market Surprise

Many financial experts have been scratching their heads about the dramatic turn of events for Treasury yields, as the stock market continued tumbling through last Tuesday (before beginning a slow recovery Wednesday). What caused bond prices to sink at the same time that the stock market was also still declining?

One theory is that investors predict tariff-triggered trade wars will push inflation higher by way of more expensive consumer goods. If inflation rises, that could force the Federal Reserve to keep interest rates high for longer. And that, in turn, makes locking in today’s Treasury rates less appealing—driving their price down.

Another top theory is that Trump’s stricter-than-expected global tariffs could cause foreign governments to retaliate by dumping their U.S. bonds. Or even aside from retaliation, countries may opt to buy fewer new U.S. bonds going forward. In both cases, this could drive U.S. bond prices lower.

In all scenarios right now, the dominant theme is “uncertainty”. With it unclear which countries will retaliate, which will negotiate, and which tariffs President Trump may choose to retract or soften—and, as a result, how inflation and economic growth will be impacted—markets and the Federal Reserve are in a state of limbo awaiting greater market clarity. The Fed next meets on May 6–7, and at this time, interest rate traders have priced in a greater than 80% probability that the central bankers will leave rates where they are.

As for mortgage rates, they have seen a slight bit of relief so far this week, with a mild drop Monday, and Tuesday rates moving lower still. But where they go from here is difficult to predict

How We Track the Best Mortgage Rates

The national and state averages cited above are provided as is via the Zillow Mortgage API, assuming a loan-to-value (LTV) ratio of 80% (i.e., a down payment of at least 20%) and an applicant credit score in the 680–739 range. The resulting rates represent what borrowers should expect when receiving quotes from lenders based on their qualifications, which may vary from advertised teaser rates. © Zillow, Inc., 2025. Use is subject to the Zillow Terms of Use.