Mortgage Rates Reach 7.45% as Treasury Yields Climb
The average rate on a 30-year fixed mortgage reached 7.45% on Thursday, according to Mortgage News Daily, as a selloff in bonds pushed Treasury yields higher. The reading represented a 19-basis-point increase from the previous day’s 7.26%, underscoring how quickly borrowing costs can change within a single trading day.
Mortgage News Daily surveyed brokers and lenders in the morning, then repeated its survey after the yield on the 10-year Treasury rose further in the afternoon. Its updated figure was higher than Freddie Mac’s reading, released Thursday morning, that showed rates had just crossed 7%. The two figures cover different periods: Freddie Mac’s report reflected an average for the preceding week, while Mortgage News Daily tracked conditions during the day.
Matthew Graham, chief operating officer at Mortgage News Daily, said its daily measure first exceeded 7% on September 10 after inflation reports increased expectations of a Federal Reserve rate increase. He also cited Fed comments, higher oil prices and stronger economic data as factors contributing to subsequent increases. The report said the 30-year fixed rate had fallen to 5.99% in late February before rising at the start of the war with Iran. Rates climbed again in early September, particularly after the Fed raised its benchmark rate.
Mortgage rates tend to move broadly with yields on 10-year U.S. Treasury notes, though the relationship is not exact. Higher financing costs are adding to challenges in a housing market already affected by elevated home prices, low consumer confidence and limited availability of affordable homes.
Graham said the afternoon bond selloff lacked an obvious catalyst, cautioning against assigning a definitive explanation to the move. The report did not identify a single event that accounted for the jump in yields. For buyers, the differing rate readings illustrate why the timing and methodology of mortgage surveys matter.