New York, Jan 21, 2026, 03:21 (EST)
- The 30-year fixed rate jumps 14 basis points to 6.21%, bouncing back from a recent decline
- Tariff threats tied to Greenland push bond yields higher, sparking renewed rate volatility
- The surge puts the White House’s $200 billion mortgage-bond buying plan to the test
U.S. mortgage rates surged Tuesday, rattled by tariff news and geopolitical turmoil sparked by President Donald Trump’s bid to acquire Greenland, shaking up bond markets.
The average top-tier 30-year fixed mortgage rate climbed 14 basis points, reaching 6.21%, Mortgage News Daily reports. Yahoo
This move is significant since borrowers were beginning to get some relief right as the housing market approaches its usual spring surge.
When prices are high and most buyers depend on financing, even slight changes can quickly push monthly payments up.
On Jan. 9, rates spiked briefly to 5.99% before easing back into the low-6% territory last week, according to Mortgage News Daily.
The move also puts the administration’s $200 billion plan to buy mortgage-backed securities—bonds tied to pools of home loans issued by Fannie Mae and Freddie Mac—to the test. The Federal Housing Finance Agency kicked things off with a $3 billion purchase, according to a Reuters report. Reuters
The bond market shifted sharply after Trump warned of fresh tariffs targeting European nations siding with Denmark on Greenland.
He announced tariffs would begin at 10% on Feb. 1, climbing to 25% by June 1 unless the U.S. strikes a deal to buy Greenland, Reuters reported. Reuters
Benchmark Treasury yields climbed to roughly 4.275% on Tuesday, hitting their highest point since early September, according to Mortgage Professional America.
Kaspar Hense, senior portfolio manager at BlueBay Fixed Income, warned that if the Greenland dispute heats up, EU investors might start dumping U.S. government bonds. He also flagged the risk of rising interest rates across the globe. Mpamag
Krishna Guha, head of global policy and central banking strategy at Evercore ISI, didn’t mince words: “This is ‘sell America’ again within a much broader global risk off,” he wrote.
Mortgage News Daily noted that Tuesday’s rate mirrored the level seen right before the White House unveiled its mortgage-bond buying program, suggesting the initial boost had mostly been priced in already.
Unlike the Fed’s previous quantitative easing programs, the White House’s plan lacks a clear timetable, forcing investors to gauge its effects on the fly. Mortgagenewsdaily
Markets are keeping an eye on Trump’s visit to the World Economic Forum in Davos, where Greenland is set to steal the spotlight on the sidelines.
“Today is a good day to see if the White House’s mortgage-backed security purchase game plan works,” said Logan Mohtashami, lead analyst at HousingWire.
“The past week has delivered an unusually high level of noise,” said Jeff DerGurahian, chief investment officer and head economist at loanDepot, noting it has driven Treasury and mortgage rates upward. Housingwire
Mortgage rates fell last week, sparking a 28.5% jump in total application volumes from the previous week, the Mortgage Bankers Association reported. Borrowers are clearly responding, edging back toward refinancing.
Freddie Mac reported the average 30-year fixed mortgage rate at 6.06% for the week ending Jan. 15, marking its lowest point since September 2022. This is down from 7.04% at the same time last year. Cnn
Builders have stepped up incentives, like mortgage rate buydowns—where they cover the upfront cost to reduce a buyer’s interest rate—to keep sales afloat. These tactics are squeezing margins.
“We accelerated the use of those incentives throughout the quarter,” D.R. Horton said during its post-earnings call.
The homebuilder topped quarterly profit estimates on Tuesday but cautioned that rising incentives would probably push gross margins lower, Reuters reported. Reuters
The path forward remains uncertain. Mortgage News Daily cautioned it’s too early to tell if Tuesday’s surge signals a larger trend, highlighting the impact of upcoming economic reports and the ongoing Greenland dispute.
Many homeowners remain locked into mortgages with rates far below current levels, so even if rates fall again, listings will likely stay tight and refinancing won’t pick up unless the drop is significant.
This week, a Forbes.com column took a wider view, suggesting cheaper borrowing does more than just affect home buying. It can reshape household budgets and influence long-term financial plans. Forbes
