HousingWire Lead Analyst Logan Mohtashami said that Thursday’s movement is “a simple story” and predicted that mortgage pricing would be lower by roughly 10 basis points.

“The markets don’t like the tariff plan, and stocks are selling off big. Even though the jobless claims data today was fine, people are worried about the future if these tariffs stick,” Mohtashami said, adding that tariffs are looking bearish.

“Mortgage pricing should be lower today, but on days when the 10-year yield drops a lot, the mortgage spreads do get worse, so the rates might not be as low as people would like to see.”

Melissa Cohn, regional vice president of William Raveis Mortgage, agreed with Mohtashami’s sentiments.

“The markets have taken the new tariffs as very bad news,” Cohn said, adding that “it was hoped that the tariffs would not be as high, and the mood in the markets is gloomy.”

Cohn acknowledged the possibility that today’s rate lull won’t last long.

“Mortgage rates are going down at the moment,” she said. “However, when the higher costs of goods start to push up the rate of inflation, it is quite possible that rates will go back up. I expect to be on a mortgage rate roller coaster for the next few months.”

Polly CEO Adam Carmel shared that uncertainty looms amid Thursday’s rate news.

“Uncertainty in the macro is driving volatility — and likely will persist. As a result, it probably signals a bias for a lower rate environment. But all of this can change at a moment’s notice,” he said.

Freddie Mac‘s Primary Mortgage Market Survey also saw mortgage rates decline to a low level. In addition, the Optimal Blue Mortgage Market Indices’ 30-year fixed rate conforming index dropped by 10 bps during the day to 6.5%.

“[That’s] the lowest reading we’ve tracked since October 2024,” Optimal Blue’s Mike Vough said. “In light of yesterday’s tariff announcements, this signals that downward pressure on rates will likely continue to escalate. While today’s focus is on rates going down, most market observers expect consumers to bear the brunt of any tariff-related price increases.”

Ramon Walker, president and CEO of Client Direct Mortgage, believes that tariffs are having an unexpected influence on interest rates as market uncertainty pushes investors toward safer assets.

“With the stock market under pressure, investors are shifting to bonds as a safe haven, which is driving yields down,” Walker said. “This may align with what President Trump hinted at months ago — a strategy to bring down the 10-year Treasury.”

The connection between tariffs and mortgage rates is becoming more apparent as financial markets react. Samir Dedhia, CEO of One Real Mortgage, noted that while weekly mortgage rate changes have seemed modest, Thursday’s sharp decline marks the lowest levels since December 2024.

Dedhia added that the movement dovetails with financial market volatility “driven by growing fears surrounding the latest round of proposed tariffs.”

Investor anxiety over the wider economic impact of tariffs has triggered a sell-off in equities, despite the “meaningful” rate drop, Dedhia said.

“This shift has driven bond yields lower, which in turn is pulling mortgage rates down. The rapid rate movement underscores just how sensitive the market is to policy headlines and geopolitical developments,” he added.

Cohn is concerned about the potential economic repercussions.

“The announcement of the new tariffs has caused the equity markets to tank, and bond yields have also fallen significantly as the markets fear that the steeper-than-expected tariffs will set off a global trade war and damage the economy,” she said.

“The good news for the real estate market is that mortgage rates are plummeting as well. The bad news for the real estate market is that significant wealth is being lost in the equities markets and people will be loath to cash in right now.”

While tariffs could introduce some inflationary pressure, the resulting drop in mortgage rates could be instrumental in improving homebuyer access to liquidity, Walker said. But loan officers are mixed on whether conversations about refinancing need to be immediate.

Shane Kidwell, a mortgage coach and CEO of Washington state-based Dwell Mortgage, said he cautions against reaching out to borrowers or being “reactionary” when a noteworthy event such as rate movement occurs.

Vough raised the concern that rates could bounce back up as quickly as they declined.

“The question is, if such a circumstance spikes inflation, would rates bounce back up? Maybe, but there are significant unknowns that can’t be discounted, in that increased inflation could lead to higher rates, while economic malaise could lead to lower rates.

“In the meantime, lenders should keep an eye on their risk exposure to ensure interest rate risk neutrality.”