Initially, it seemed that the stock market crash triggered by tariffs might benefit nervous homebuyers, as they anticipated lower mortgage rates despite losses in their stock portfolios. However, this optimism proved short-lived as mortgage rates increased significantly on Monday and continued to rise. Average 30-year mortgage rates fluctuated around 6.82%, reflecting the surge in 10-year Treasury yields to 4.18%. Experts in the housing market anticipate ongoing volatility in mortgage rates due to uncertainty surrounding global tariffs imposed by President Trump.

Chen Zhao, from Redfin's economics team, emphasized the unpredictability in mortgage rates, attributing the rise to the close correlation with Treasury yields. This sudden shift in yields indicates concerns beyond a potential recession forcing the Federal Reserve to lower interest rates; the market is also factoring in stagflation, a challenging scenario for central banks to manage. Despite Trump's calls for lower rates, the Fed remains cautious in response to economic uncertainties, impacting expectations regarding future monetary policy and thus influencing mortgage rates.

Philip Bennett of Bennett Capital Partners observed the unexpected increase in rates on Monday, contrasting his earlier anticipation of declining Treasury yields and the subsequent interest from clients seeking refinancing. Despite current uncertainties, he remains optimistic, foreseeing falling commodity prices and escalating unemployment eventually leading to decreased mortgage rates, prompting renewed interest from buyers and refinancers.