Yikes!
Here’s hoping you weren’t counting on Donald Trump and Scott Bessent to deliver on their joint promise to bring down the cost of financing for hugely-expensive American homes.
Mortgage rates in the US soared 15bps over the last week to 7.12%, the MBA said Wednesday. That’s the highest since April of 2024.
As the figure above reminds you, the war was a death knell not just for the big man in Tehran, but for Trump’s late-2025 pivot to domestic affordability. If you don’t remember that pivot, no one will blame you: When policy shifts don’t produce tangible results, people tend to forget them.
Since Ali Khamenei was killed with several members of his family late in February, US mortgage rates are more than 100bps higher. That’s just murder (get it?) if you’re hoping to realize the American dream of owning a nondescript, fiber cement storage unit for your family.
Technically, rates are up five weeks in a row, but the bulk of the increase came over the past three weeks. That advance sums to 33bps.
As the figure shows, that’s among the largest three-week jumps in years.
The increase in the average 30-year fixed pushed desperate buyers into ARMs last week, the MBA said Wednesday. Specifically, the 5/1 share of overall application activity was nearly 10%.
That’s not necessarily a bad thing, but it’s not ideal, particularly for borrowers who may not fully understand what they’re getting into. (An ARM’s a gamble on rates being lower “tomorrow” than they are today.)
Note that ARMs’ share of applications was just 3% when mortgage rates plumbed record lows in the aftermath of the pandemic.
I’d be completely remiss not to point out that this is extremely embarrassing for Bessent: Suffice to say “The House” didn’t succeed in capping Treasury yields such that more Americans can buy, err, houses.
