How Market Volatility Affects Mortgage Rates & Home Prices

What Today’s Volatile Market Means for Buyers and Sellers

This past week has been a whirlwind in the financial world. If you're considering buying or selling a home right now, you may be wondering what all the headlines mean for your next move. From stock market drops to changes in mortgage rates, there's a lot happening but also some key opportunities on the horizon.

Let’s break down what’s going on, and what it means for youWhat’s Going On in the Stock Market?

Over the past week, nearly $5 trillion in global market value was wiped out, signaling growing uncertainty among investors (according to data reported by Nasdaq and Business Insider, April 2025).

The Nasdaq Composite officially entered a bear market, meaning it fell more than 20% from its recent high.
The S&P 500 briefly dipped into bear market territory, too.
And the Dow Jones Industrial Average has dropped nearly 10% since new tariffs were introduced.

A midweek rebound occurred after the U.S. President announced a 90-day pause on new tariffs, but according to AP News, volatility remains high as markets wait for more economic data and corporate earnings reports.

Why the 10-Year Treasury Yield Matters for You

You may not track it daily, but the 10-year Treasury yield plays a big role in determining mortgage rates—and right now, it’s moving.

According to Advisor Perspectives, three months ago the yield was near 5%, helping push mortgage rates above 7%.
Last Friday, it dropped to 4.01%, briefly dipping below 4% for the first time since October 2024.
By midweek, it had edged up to 4.22%, as investors reassessed future interest rate cuts.

The takeaway? When yields fall, mortgage rates usually follow, which can make buying a home more affordable.

What This Means If You’re Buying or Selling

Higher mortgage rates have kept many people from making a move. According to Freddie Mac and HousingWire, nearly half of U.S. homeowners have a mortgage rate below 4%, and about a third are locked in below 3%. This has created what's called the "lock-in effect," where homeowners hesitate to give up their current low rate.

But rates are shifting:

As of this week, the average 30-year fixed mortgage is around 6.76%, up slightly from last week’s 6.64%, according to Freddie Mac’s Primary Mortgage Market Survey.
Historically, when rates settle into the mid-6% to mid-5% range, both buyer and seller activity tends to increase.

If rates continue to decline, more homeowners may feel confident enough to list their homes and more buyers will return to the market.

Should You Consider an Adjustable-Rate Mortgage (ARM)?

If you're buying in today’s market, it’s worth learning about adjustable-rate mortgages (ARMs). These loans often start with a lower rate than fixed mortgages, offering a more affordable entry point.

According to Investopedia, ARMs usually follow benchmarks like the 1-Year Treasury or the Secured Overnight Financing Rate (SOFR).
This week, the average 5/1 ARM rate is around 6.15%, offering a savings compared to fixed rates (Mortgage Bankers Association, April 2025).

Pro tip: ARMs tend to be smarter when rates are high, while fixed rates are ideal when interest rates are low. Either way, refinancing is always an option down the road.

The Spring Market Window Is Opening

Historically, when the 10-year yield sits around 4%, mortgage rates align closer to 5.8% A level that often re-energizes buyer demand (according to Advisor Perspectives historical data).

So, what does this mean for you?

Buyers: If you’ve been waiting for better mortgage conditions, this may be your moment to prepare. Lower rates could boost your purchasing power.
Sellers: As rates improve, more buyers may enter the market, which could increase interest in your home. It’s a great time to speak with your agent about pricing and timing.

What You Can Do Right Now

Buyers: Talk to a lender and get pre-approved now so you’re ready when the right rate and right home come along.
Sellers: Connect with a trusted real estate professional to understand your local market and how demand is shifting.
Everyone: Stay informed, not overwhelmed. Market conditions are constantly evolving, and with the right strategy, you can move confidently no matter what’s happening in the headlines.