On Jan. 8, President Trump posted on Truth Social that he was directing Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities. Federal Housing Finance Agency Director Bill Pulte confirmed the order the same day.

By Friday morning, the Mortgage News Daily index had fallen from 6.21% to 5.99% — the first sub-6% reading since February 2023. The drop was driven by anticipation: markets repriced bonds before a single purchase was executed. Pulte confirmed $3 billion in purchases had already begun by Friday afternoon.

Over the weekend before Inauguration Day, Trump threatened 10% tariffs on eight European nations — targeting Germany, France, Denmark, the United Kingdom and others — to pressure Denmark to cede Greenland. European leaders immediately pushed back.

The 10-year Treasury yield jumped to 4.3% as investors repriced inflation risk. Mortgage rates closely track the 10-year yield. By Tuesday morning, the MND index had climbed 14 basis points to 6.21% — exactly reversing the Jan. 9 gain. Trump stepped back from the tariff threat within days, but rates never returned to 5.99%.

As the Greenland threat faded, rates drifted steadily lower through February. Tariff anxiety — paradoxically — sent investors into Treasuries, pushing yields and mortgage rates down.

By the final week of February, MND's daily index was hovering around 6%, touching 5.99% on Feb. 23 and again on Feb. 27. Freddie Mac's weekly survey for the same period recorded 5.98% — the first reading below 6% in three-and-a-half years. Refinance applications surged. Two days later, everything changed.

On Feb. 28, the U.S. and Israel launched joint strikes against Iran. Bond markets expected a flight to safety — but got the opposite. Iran threatened the Strait of Hormuz, through which roughly 20% of the world's oil flows. Oil prices surged. Inflation fears spiked.

When investors expect higher inflation, they demand higher yields on long-term bonds — and mortgage rates follow. Two months of careful progress unwound in three days.

The Federal Reserve voted unanimously to hold its benchmark rate at 3½% to 3¾%, citing "uncertain impacts from the war with Iran." But officials raised their 2026 core inflation forecast to 2.7% and signaled only one possible cut for the rest of the year.

In January, markets had priced in two or three cuts. That reversal drove bond yields higher. The probability of a rate hike climbed above 50% in futures markets for the first time.

The Mortgage News Daily index reached 6.62% — the highest since summer 2025 and a climb of 63 basis points from the Feb. 27 low in fewer than four weeks.

Freddie Mac's weekly survey recorded 6.38% for the same period — the largest single-week jump since Trump's original Liberation Day tariffs in April 2025. On a $400,000 home with 20% down, the swing from February's low to March's peak added about $131 a month in principal and interest — roughly $1,575 a year — to a buyer's costs.

By April 1, the MND index had pulled back to 6.45%, down from the late-March high of 6.62%. MND reported rates were "slightly lower" again on April 2 as bond markets responded to tentative signals of potential ceasefire talks in the Middle East.

Even with the modest retreat, rates remain well above the February low. Economists warn that any re-escalation of the Iran conflict or a hotter-than-expected inflation reading could push rates back toward 6.6% quickly.