Tariffs could lower mortgage rates says mortgage expert

I know what you’re thinking: tariffs? Mortgages? What’s the connection? It might sound weird, but stick with me.

Here’s the thing: economic uncertainty can actually be… good? Well, good for mortgage rates, at least. That’s what some experts are saying.

The Roller Coaster Ride

“I expect to be on a mortgage rate roller coaster for the next few months,” says Melissa Cohn, a mortgage veteran with William Raveis Mortgage.

Why the wild ride? It all comes down to those tariffs we keep hearing about. Apparently, they’re shaking things up.

How Tariffs Affect Rates

Cohn explains that the announcement of new tariffs has caused both the stock market and bond yields to take a dive. And guess what? That makes mortgage rates drop too.

When the economy looks shaky, investors often flock to safer investments like bonds. This increased demand for bonds pushes their yields down, and mortgage rates tend to follow.

“Mortgage rates are going down at the moment,” Cohn notes.

Good News, Bad News

Lower mortgage rates are great for the real estate market, right? Absolutely! But there’s a catch.

Cohn warns that the higher cost of goods brought on by tariffs could also push up inflation. And you guessed it, inflation can cause rates to climb back up.

With people losing money in the stock market, they might be hesitant to cash out investments for a down payment.

A “Good Day for Business, Bad Day for My Brokerage Account”

“What’s bad for the economy is good for mortgage rates,” Cohn told Bankrate. “I wake up in the morning knowing it’s going to be a good day for business and a bad day for my brokerage account. ”

Don’t Get Too Excited

Before you start celebrating rock-bottom rates, keep in mind that experts aren’t expecting a huge drop. Dan Richards, president of Flyhomes Mortgage, told USA Today that rates are “unlikely to fall as quickly, or as much,” as other markets.

The bottom line? It’s a complicated situation, and uncertainty could keep some buyers on the sidelines.