Spring is always the most competitive — and stressful — time of the year for homebuyers in the Twin Cities.

But a global trade war is making this season particularly tense.

Mortgage interest rates, which had been slowly trending down for the first three months of the year, suddenly spiked at the beginning of this month. And though rates have come down a bit and are still slightly below historical averages, they've been unusually volatile from day to day, giving buyers another reason to fret.

After slipping at the beginning of April to 6.48%, the lowest level this spring, the rate on a 30-year fixed-rate conforming mortgage neared 7% Monday, according to Optimal Blue Mortgage Market Indices.

"The last couple weeks have been like a whipsaw," said Keenan Raverty, vice president at Bell Bank Mortgage.

The situation is vexing but not a dealbreaker for many buyers, especially those who need to buy quickly.

Jake Prohofsky, a young professional and first-time buyer in his mid-20s, has been eager to have his own house since the day he moved out of his parents' home three years ago. He recently got engaged, ramping up the sense of urgency even more.

"We both want to find a house to make it a home and get settled into before we get married," he said.

Like many other house shoppers, he's hopeful the timing of an eventual purchase will work in his favor and that rates will dip a bit when it comes time to buy.

"The climate is so unstable, that the future could either be worse or lead to more homebuying opportunities," he said. "Unfortunately, I just have to go with it and hope things become more stable."

Unprecedented unpredictability

Recent housing market data in the Twin Cities and throughout Minnesota depict the usual results: an active spring buying-and-selling season.

On Tuesday, new data from a trio of Realtors groups showed signed purchase agreements increased 4% statewide and 5.5% in the metro area compared with a year ago. Sellers were even more active; as compared to last year, new listings increased 11.4% statewide and 12.1% across the 16-county metro.

Prices also posted healthy gains, as the median price of all sales in the metro was $380,000, a 3.5% increase from last year. Across the state, the median price increased 3.5% to $345,000, according to Minnesota Realtors.

What those numbers belie: the worst of the tariff turmoil and subsequent declines in the stock market, which started in early April.

The latest data for the week ending April 5 showed buyers are feeling the pressure. In the Twin Cities, buyers signed 1,043 purchase agreements, nearly 20% more than last year at this time, according to the St. Paul Area Association of Realtors. Sellers, meanwhile, listed 1,534 properties, about 200 more than the week before and 8% more than the prior year.

"My buyers share most of the same uncertainty we're all feeling," said Jennifer Livingston, president of the St. Paul Area Association of Realtors, in a statement. "But motivated buyers are committing and moving forward with confidence. And while they're appreciating a slower and less-frantic market, they still need to be ready to act when they find the right home."

Raverty said that while rates have been the most unstable he's seen in his more than 30 years in the business, it's been a "volatile-flat market." That means while rates are bouncing around day to day, they have remained fairly stable from week to week.

"Even with the volatility in the markets, we still have many folks actively looking to purchase," Raverty said.

Typically, during times of economic uncertainty and declines in the stock market, bond prices increase and yields fall as investors seek the safe haven of U.S. Treasuries. Normally, mortgage rates rise and fall in line with yields on 10-year Treasuries.

But after the April 2 tariff announcements, a bond sell-off ensued, causing bond prices to fall and yields to rise. That erased previous declines in rates.

The Mortgage Bankers Association said that during the week of April 9, mortgage application volume nationwide spiked 20% from the previous week. Applications to buy a house were up 9% from a week earlier and 24% compared to a year ago.

Recent declines in rates also triggered a brief refinancing boom, with applications to refinance up 35% week-over-week but up 93% from a year ago.

For Tony Weick, president of Bell Bank Mortgage, this recent rate variability has been unprecedented. While many forecasters still expect rates to be down slightly by the end of the year, he said predicting the future is going to be difficult.

"There has been a lot of uncertainty of what's going to be the next step here," he said. "We're all throwing a dart right now."

No wait and see

That guesswork is affecting the market.

While sellers are still in control, houses are taking longer to sell than they have in several years. And consumer confidence is declining as concerns about inflation or a recession increase. In particular, consumers are worried about the labor market and job security.

The Economics Group at Wells Fargo noted in a Tuesday update that the consumer confidence index fell in March to 92.9, its lowest reading since early 2021.

"I'm a big believer that consumer confidence has a huge impact on residential mortgages," Weick said. "But people always need a place to live. ... As you go to high or low rates, that never changes."

For Prohofsky, timing a purchase has been a challenge. He's been renting an apartment, and his lease is up in six months. He's struggling with the decision to buy or renew.

He's been house-hunting around the south metro since mid-March in the $425,000 and under range. He and his fiancée found a house they loved on its second day on the market and made a quick decision.

"As our Realtor was in the process of writing the offer, she got a call from the selling agent that said the sellers had already accepted a cash offer," he said. "They are going really fast."

Though he's still not sure how the current economic situation will play out — with much of what's happening in new territory and changing by the day — he's not putting this big life decision on hold.

"Ideally, I would love to have a lower mortgage rate," he said. "But being that houses are going so fast, I may just have to go with what the rate is for that day.

"But I'm definitely hoping they drop."