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Mortgage rates average 6.43% this week, the lowest in a year

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The low employment report added to the drop in rates. (iStock)

Mortgage rates dipped significantly this week, dropping to the lowest level in more than a year, according to Freddie Mac. Rates for 30-year, fixed-rate mortgages averaged 6.47%, down from 6.73% last week.

“Mortgage rates plunged this week to their lowest level in over a year following the likely overreaction to a less than favorable employment report and financial market turbulence for an economy that remains on solid footing,” Freddie Mac Chief Economist Sam Khater said.

Last year at this time, the average interest rate for 30-year mortgages was 6.96%, signaling that rates are finally starting to come down closer to the 6% mark.

Rates for 15-year mortgages also took a large dive, dropping to 5.63% from 5.99%. Last year, rates were much higher, at 6.43%.

“The decline in mortgage rates does increase prospective homebuyers’ purchasing power and should begin to pique their interest in making a move,” Khater said. “Additionally, this drop in rates is already providing some existing homeowners the opportunity to refinance, with the refinance share of market mortgage applications reaching nearly 42%, the highest since March 2022.”

If you are ready to shop around for a home loan, consider using Credible to help you easily compare interest rates from multiple lenders in minutes.

THE AVERAGE DOWN PAYMENT FOR THE TYPICAL US HOME REACHES $127,750: ZILLOW

The election is influencing prospective buyers’ timeline

The upcoming presidential election is having an effect on the homebuying market, a Veteran Homebuying Report, conducted by Veteran United Home Loans, found. The report asked veterans, active-duty military members and civilians how the election informed their decision to buy or not buy homes.

About 60% of people who plan to buy a home in the next few years said the current election is a factor in their purchasing timeline. Nearly 38% plan to wait to buy until after the election

“The upcoming election is clearly weighing on the minds of prospective homebuyers,” said Chris Birk, Veterans United Home Loans vice president of mortgage insight. “Americans are considering the potential impacts of political changes on the economy and housing market, leading many to adjust their buying timelines accordingly.”

Many buyers are waiting to see what happens to the market after the outcome of the election has been determined. All survey respondents ranked inflation and housing affordability as their top two election issues, which are both issues that seriously affect the housing market.

A site like Credible can let you view multiple mortgage lenders and provide you with personalized rates within just minutes, all without impacting your credit.

MORTGAGE PAYMENTS SOAR FOR PROSPECTIVE HOMEOWNERS IN SWING STATES: REALTOR.COM

More homebuyers are moving to disaster-prone areas, citing low prices and politics

A few years ago, Americans were leaving disaster-prone states in the thousands. That trend has turned around, particularly in states like Texas and Florida. High-fire-risk counties, many of which are in Texas, saw over 63,000 people moving in rather than out in 2023, a Redfin study found.

High-flood counties also saw a large influx of over 16,000 people, with many of those people moving to Florida. Despite high insurance costs in states like Florida, there are other factors driving these moves.

“Ballooning insurance costs and intensifying natural disasters are driving thousands of Americans out of risky areas, but those people are quickly being replaced by other people for whom climate change isn’t the top concern,” Redfin Senior Economist Elijah de la Campa said.

“For a lot of Americans, things like cost of living and proximity to family take precedence over catastrophe risk, which can feel less immediate and more abstract,” de la Campa said. “But the cost-benefit calculus seems to be shifting in places like California and Florida, where skyrocketing home insurance costs and an uptick in high-profile disasters have had a tangible impact on residents and made national news.” 

Florida accounted for over 50% of the migration to high-flood-risk areas in 2023. Although that’s high for Florida, it’s down slightly from 57.3% in 2022. Meanwhile, Texas had five out of the 10 high-fire-risk counties Americans moved to.

“The main climate issue in Houston is flooding, but the major factor driving me away is the heat,” Redfin Premier real estate agent Nicole Nodarse explained. “But a lot of people are still moving here because they like the low prices and the politics. Homeowners insurance is becoming a big deal, though; it’s much more expensive than it used to be, and a lot of people who installed 30-year roofs are now having to replace them after 15 years because some insurers won’t cover the home if the roof is older than that.”

You can explore your mortgage options in minutes by visiting Credible to compare rates and lenders.

MANY HOMES ARE SITTING STAGNANT ON THE MARKET, CAUSING MORE FREQUENT PRICE DROPS

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

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China’s response to U.S. tariffs will likely focus on stimulus, trade

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Chinese national flags flutter on boats near shipping containers at the Yangshan Port outside Shanghai, China, February 7, 2025. 

Go Nakamura | Reuters

BEIJING — China’s reaction to new U.S. tariffs will likely focus on domestic stimulus and strengthening ties with trading partners, according to analysts based in Greater China.

Hours after U.S. President Donald Trump announced additional 34% tariffs on China, the Chinese Ministry of Commerce called on the U.S. to cancel the tariffs, and vowed unspecified countermeasures. The sweeping U.S. policy also slapped new duties on the European Union and major Asian countries.

Chinese exports to the U.S. this year had already been hit by 20% in additional tariffs, raising the total rate on shipments from China to 54%, among the highest levied by the Trump administration. The effective rate for individual product lines can vary.

But, as has been the case, the closing line of the Chinese statement was a call to negotiate.

“I think the focus of China’s response in the near term won’t be retaliatory tariffs or such measures,” said Bruce Pang, adjunct associate professor at CUHK Business School. That’s according to a CNBC translation of the Chinese-language statement.

Instead, Pang expects China to focus on improving its own economy by diversifying export destinations and products, as well as doubling down on its priority of boosting domestic consumption.

Watch for cascading tariffs as tariffs reroute trade within Asia, says economist

China, the world’s second-largest economy, has since September stepped up stimulus efforts by expanding the fiscal deficit, increasing a consumption trade-in subsidy program and calling for a halt in the real estate slump. Notably, Chinese President Xi Jinping held a rare meeting with tech entrepreneurs including Alibaba founder Jack Ma in February, in a show of support for the private sector.

The policy reversal — from regulatory tightening in recent years — reflects how Beijing has been “anticipating the coming slowdown or even crash in exports,” Macquarie’s Chief China Economist Larry Hu said in a report, ahead of Trump’s latest tariff announcement. He pointed out that the pandemic-induced export boom of 2021 enabled Beijing to “launch a massive regulatory campaign.”

“My view stays the same,” Hu said in an email Thursday. “Beijing will use domestic stimulus to offset the impact of tariffs, so that they could still achieve the growth target of ‘around 5%.'”

Instead of retaliatory tariffs, Hu also expects Beijing will focus on still using blacklists, export controls on critical minerals and probes into foreign companies in China. Hu also anticipates China will keep the yuan strong against the U.S. dollar and resist calls from retailers to cut prices — as a way to push inflationary pressure onto the U.S.

China’s top leaders in early March announced they would pursue a target of around 5% growth in gross domestic product this year, a task they emphasized would require “very arduous work” to achieve. The finance ministry also hinted it could increase fiscal support if needed.

About 20% of China’s economy relies on exports, according to Goldman Sachs. They previously estimated that new U.S. tariffs of around 60% on China would lower real GDP by around 2 percentage points. The firm still maintains a full-year forecast of 4.5% GDP growth.

Changing global trade

What’s different from the impact of tariffs under Trump’s first term is that China is not the only target, but one of a swath of countries facing hefty levies on their exports to the U.S. Some of these countries, such as Vietnam and Thailand, had served as alternate routes for Chinese goods to reach the U.S.

At the Chinese export hub of Yiwu on Thursday, businesses seemed nonchalant about the impact of the new U.S. tariffs, due to a perception their overseas competitors wouldn’t gain an advantage, said Cameron Johnson, a Shanghai-based senior partner at consulting firm Tidalwave Solutions.

He pointed out that previously, the U.S. had focused its trade measures on forcing companies to remove China from their supply chains and go to other countries. But Chinese manufacturers had expanded overseas alongside that diversification, he said.

“The reality is this [new U.S. tariff policy] essentially gives most of Asia and Africa to China, and the U.S. is not prepared,” Johnson said. He expects China won’t make things unnecessarily difficult for U.S. businesses operating in the country and instead will try harder to build other trade relationships.

Since Trump’s first four-year term ended in early 2021, China has increased its trade with Southeast Asia so much that the region is now Beijing’s largest trading partner, followed by the European Union and then the U.S.

The 10 member states of the Association of Southeast Asian Nations (ASEAN) joined China, Japan, South Korea, Australia and New Zealand in forming the world’s largest free trade bloc — the Regional Comprehensive Economic Partnership (RCEP) — which came into being in early 2022. The U.S. and India are not members of the RCEP.

“RCEP member countries will naturally deepen trade ties with one another,” Yue Su, principal economist, China, at the Economist Intelligence Unit, said in a note Thursday.

“This is also partly because China’s economy is likely to remain the most — or at least among the most—stable in relative terms, given the government’s strong commitment to its growth targets and its readiness to deploy fiscal policy measures when needed,” she said.

Uncertainties remain

The extent to which all countries will be slapped with tariffs this week remains uncertain as Trump is widely expected to use the duties as a negotiating tactic, especially with China.

He said last week the U.S. could lower its tariffs on China to help close a deal for Beijing-based ByteDance to sell TikTok’s U.S. operations.

But the level of new tariffs on China was worse than many investors expected.

“Unlike some of the optimistic market forecasts, we do not expect a US-China bilateral grand bargain,” Ting Lu, chief China economist at Nomura, said in a note Thursday.

“We expect tensions between these two mega economies to worsen significantly,” he said, “especially as China has been making large strides in high-tech sectors, including AI and robotics.”

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