How Low Can Mortgage Rates Go with Tariff Ruling and Kevin Warsh as Fed Chair?
•February 23, 2026
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Why It Matters
Mortgage rates are likely to stay near 5.75%, making current affordability the decisive factor for homebuyers and shaping lender strategies.
Key Takeaways
- •Supreme Court ruled Trump’s tariff emergency illegal, ending “Godzilla” tariffs.
- •Analyst expects limited impact on mortgage rates without labor market shift.
- •Fed likely remains near‑neutral; rates stay around 5.75% unless job market softens.
- •Mortgage spreads must narrow dramatically for rates to dip below 5.5%.
- •Waiting for lower rates is risky; buyers should assess personal affordability now.
Summary
The episode opens with Logan Modos Shami analyzing the Supreme Court’s decision that former President Trump’s use of a national‑emergency declaration to impose tariffs was unlawful, effectively ending the “Godzilla” tariffs that have loomed over trade policy.
Modos explains that the ruling has two theoretical effects on mortgage rates: a possible surge in bond‑market supply that could push yields higher, and a potential boost to economic activity that might allow the Federal Reserve to adopt a more dovish stance. He argues that the labor market and Fed policy dominate the outlook, noting that the 10‑year Treasury yield is flat and mortgage spreads remain the key driver.
He repeatedly cites a “line in the sand” at 5.75% for 30‑year fixed rates, stressing that only a sharp narrowing of spreads, a dovish Fed, or a weakening labor market could push rates below that level. He dismisses popular speculation that a new Fed chair or AI‑driven recession will deliver 3‑4% rates, urging listeners to ignore social‑media hype.
The practical takeaway is that mortgage rates are unlikely to fall significantly in the near term, so prospective buyers should base decisions on current affordability rather than waiting for an uncertain rate drop. Lenders and investors should monitor labor‑market data and Fed communications more closely than trade‑policy headlines.
Original Description
On today’s episode, Editor in Chief Sarah Wheeler talks with Lead Analyst Logan Mohtashami about what the Supreme Court’s tariff ruling means for mortgage rates, and what other factors could bring rates down.
Related to this episode:
Trump’s tariffs overturned by Supreme Court in 6-3 decision
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The HousingWire Daily podcast brings the full picture of the most compelling stories in the housing market reported across HousingWire. Each morning, listen to editor in chief Sarah Wheeler talk to leading industry voices and get a deeper look behind the scenes of the top mortgage and real estate.
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