Tariff Tension & Mortgage Moves: How Local Buyers Are Getting Creative in 2025

If the past few weeks have felt like a whirlwind, you're not imagining it. Headlines about rising interest rates, tariff tensions, and a shift in mortgage trends are stirring up new questions for buyers and sellers across Boston and the South Shore.

A new report from CNBC sheds light on a growing trend: as tariffs push borrowing costs higher, more homebuyers are turning to adjustable-rate mortgages (ARMs) in order to access lower initial monthly payments.

“Given the jump in rates, more borrowers are opting for the lower initial rates that come with an ARM, with initial fixed rates closer to 6 percent in our survey last week,” said Mike Fratantoni, chief economist at the Mortgage Bankers Association.

In just one week, ARM loan applications jumped a full percentage point—reaching 9.6% of total loan volume, the highest share since November 2023. And when measured by loan amount, nearly a quarter of all mortgage application dollars last week were for ARMs.

Why? Larger-loan borrowers—common in high-priced markets like Boston and the South Shore—are looking for flexibility as long-term rates creep above 7%.

The “Wait and See” Phase—Still Very Real

As we noted in our most recent market update, many would-be buyers and sellers have hit pause. Between economic uncertainty, rate volatility, and confusing headlines, it’s no wonder people are asking:

• Should I wait to buy or sell?

• Will interest rates come back down?

• Is the market shifting again?

And yet, here on the South Shore and in Greater Boston, momentum is slowly returning. Buyers are re-engaging—strategically—and sellers are watching inventory rise while weighing their timing.

Demand Isn’t Dead—It’s Just Smarter

Across towns like Hingham, Cohasset, and Scituate, buyer demand hasn’t disappeared—it’s just more intentional. We’re seeing clients explore creative financing options, expand their search areas, and act quickly when the right home pops up.

Even with higher rates, urgency hasn’t vanished—especially in neighborhoods with tight supply and desirable homes.

For Sellers: Strategy Still Wins

With inventory rising and buyer behavior shifting, strategy matters more than ever.

The myth that “you can’t get 10 offers anymore” simply isn’t true—but those competitive outcomes are happening on homes that are:

• Priced correctly

• In tight, high-demand markets

• Professionally staged and expertly marketed

We’ve seen multiple-offer scenarios this spring in Hingham, Duxbury, and South Boston—proof that motivated buyers are still out there, and they’re ready to compete for the right home.

So, What Should You Do?

Whether you’re feeling pressure to act before rates climb higher, or you’re simply overwhelmed by the market’s mixed signals—you’re not alone. This is a time to gather good information, talk through your options, and make moves that align with your long-term goals.

If you want a clear, honest conversation about what’s happening in your neighborhood—and what’s realistic based on your budget, timeline, or property—let’s talk.

No pressure. Just local perspective you can trust.