Mortgage rates surge amid tariff uncertainty 

Mortgage rate volatility has arrived as investors try to figure out how to navigate an intensifying trade war.

The 30-year fixed-rate mortgage jumped from 6.60% to 6.82% on Monday, April 8, the biggest 24-hour hike so far this year, according to Mortgage News Daily. The rise continued Tuesday morning, but at a slower pace, hitting 6.85% as stocks surged early in the trading session.

Rates fell last week as investors fled stocks for the safety of bonds, with the increase of bond purchases typically leading to lower mortgage rates.

Single-day spike follows 5-month low: The latest uptick was a bit of a surprise after rates hit the lowest point in five months just three days ago. The stock market continued to slip on Monday, though less dramatically than at the end of last week. MND Chief Operating Officer Matthew Graham addressed the rate drop in an online post, noting that speculation on whether other countries will be able to negotiate new tariffs adds pressure to the bond market.

The 10% baseline tariffs on individual countries that President Donald Trump announced on April 2 are already in place, with higher rates slated to take effect on April 9. With China's 34% reciprocal tariff on U.S. products set to start on April 10, Trump on Monday threatened to implement an additional 50% tariff on Chinese imports if the countermeasure proceeds.

Real estate economists are expecting a roller coaster of ups and downs in mortgage rates during the spring buying season following the White House's tariffs announcement. Rates could go down as the economy slows and the stock market remains bearish, but they could also rise as tariffs increase prices and fuel inflation.

Investors worry about stagflation: Chen Zhao, who leads Redfin's economics team, suggested in an updated blog post that Monday's mortgage rate increase was due to a rising concern among investors that the Federal Reserve might decide against rate cuts. Though interest rates held steady last month, the Fed indicated two cuts could come later this year.

"In other words, we may be in for stagflation — a period of simultaneous weak economic growth and high rates/inflation — rather than a recession," Zhao wrote.

What the Fed does next will depend on what the board thinks about the higher-than-expected tariffs. Will they lead to persistent inflation, or will higher prices be short-lived? To make that decision, Zhao said the Fed will have to assess whether there is an escalating trade war — and whether consumers believe that inflation will persist.