Mortgage Rate Predictions for Week of April 28-May 4, 2025
Mortgage rates can change daily and even hourly.
President Donald Trump’s trade war and economic policies continue to ripple through the housing market, with 30-year fixed mortgage rates swinging between 6.5% and 7% in recent weeks. That’s muddying the outlook and causing a pullback in homebuying demand.
In just one week, the total volume of home loan applications plunged 12.7%, according to the Mortgage Bankers Association. “Many potential borrowers will likely stay on the sidelines until they have a better idea of the direction that rates, and the economy, are headed,” said MBA President and CEO Bob Broeksmit.
Ultimately, the path of mortgage rates over the next few weeks hinges on three things: the administration’s tariff agenda, the pace of the Federal Reserve’s interest rate cuts and the bond market’s response. Mortgage rates, which are linked to 10-year Treasury yields, are highly sensitive to the headlines, inflation and labor data — and even the president’s social media posts.
Panic-based turbulence in the financial markets has investors eyeing the Fed’s next move. The central bank, which is set to meet on May 6-7, has paused interest rate cuts until there are evident signs of an economic slowdown.
“Uncertainty about the tariffs and the volatility in the stock market could lead to a slowing economy, or even a recession, which should help get inflation lower and bring rates down,” said Gregory Heym, chief economist at Brown Harris Stevens. “But then there’s a risk we end up with higher inflation because of the tariffs, which wouldn’t be good for rates.”
Read more: Mortgage Rates at a Tipping Point. Why Trump’s Tariffs Have the Housing Market on Edge
Could the Fed still cut interest rates?
While the central bank doesn’t set mortgage rates directly, its policy moves indirectly influence consumer borrowing rates, like mortgages, over the long term.
After making three interest rate cuts in late 2024, prompted by slowing inflation, the Fed has shifted to a wait-and-see approach this year. Despite market volatility and growing concerns about the economy, the Fed has kept rates steady, a stance that the market expects to be upheld at its upcoming meeting.
If April’s labor data, released Friday, May 2, shows increased unemployment and declining economic growth, the Fed could lower interest rates in late spring or early summer. However, if inflation increases due to Trump’s sweeping tariffs, the Fed may have to delay rate cuts.
Could a recession impact mortgage rates?
A common adage is that bad news for the economy is usually good news for mortgage rates. Given the increasing likelihood of a recession in 2025, mortgage rates could drop. Even the fear of a downturn can push mortgage rates lower, as investors tend to buy safer investments like US Treasury bonds, which drives long-term yields down.
But declining investor confidence in the US economy could be disrupting that pattern. “People are starting to question how safe even US Treasuries are (and those are the gold standard for safety),” said Heym.
A significant concern is that foreign trading partners that hold massive amounts of US Treasury debt will sell that debt, causing yields to skyrocket.
And if cheaper mortgages come as a by-product of a recession, households facing job losses and tighter budgets are less likely to purchase a home.
Read more: Here’s Why a Recession Won’t Make Mortgage Rates or Home Prices Cheaper
Buy now? Or wait?
Today’s rates may seem high compared to the 2% rates of the pandemic era. But experts say getting below 3% on a mortgage is unlikely without a severe economic downturn.
If you’re waiting for mortgage rates to come down before buying, keep in mind that the large-scale economic issues affecting the housing market are beyond your control.
“Trying to time everything perfectly is a losing proposition. Rates could go up or they could go down,” said Heym. “The question is: Do you want a home?”
If the answer is yes, experts recommend focusing on two key fundamentals:
Make a homebuying budget and stick to it: Creating a realistic homebuying budget can help you decide if you can handle the costs of homeownership, and provide you with some figures for how large your mortgage should be.
Shop around for mortgage rates: Each home loan lender offers different mortgage rates and terms. Comparing offers from multiple lenders can help you negotiate a better rate. If you can’t snag a low rate but are ready to buy, you can always refinance down the road.
Watch this: 6 Ways to Reduce Your Mortgage Interest Rate by 1% or More