According to a recent report by Reuters, the interest rate on the most popular home loan in the United States decreased to 6.61% last week, marking the lowest rate since October. This drop in interest rates has led to a surge in mortgage applications, despite global market uncertainties following President Donald Trump's tariff announcements affecting various trading partners worldwide.

The Mortgage Bankers Association announced that the average contract rate for a 30-year fixed-rate mortgage dropped by 9 basis points in the week ending April 4. Consequently, mortgage applications saw a 20% increase, reaching the highest level since September.

Mortgage rates are closely linked to the 10-year Treasury note yield, which recently hit a six-month low as investors sought the safety of U.S. government bonds over fears of a recession caused by tariffs.

Joel Kan, the deputy chief economist at MBA, noted that both prospective homebuyers and individuals looking to refinance were quick to capitalize on the reduced rates.

However, the current favorable conditions for homebuyers may not last long. Federal Reserve policymakers have indicated a reluctance to make immediate cuts to short-term interest rates due to the economy's overall resilience, the potential inflationary impact of tariffs, and uncertainties surrounding trade negotiations and other factors that could influence tariff outcomes.