30-Year Fixed Mortgage Rate Climbs to 7.4% Amid Rising Treasury Yields

The average rate on the benchmark 30-year fixed mortgage rose to 7.4% this week, up from 7.28% the previous week, according to Freddie Mac’s Primary Mortgage Market Survey released Thursday. The 15-year fixed rate also edged higher to 6.73% from 6.60%.

Realtor.com senior economist Joel Berner linked the increase to continued upward pressure from the 10-year Treasury yield, which averaged 5.28% this week, nine basis points above the prior week. He noted that “a combination of inflation expectations, a broad bond market selloff, and rising fiscal deficits requiring new debt issuance is pushing bond yields higher, and mortgage rates are following.”

Berner added that the higher rates have “spooked” the housing market, noting that pending home sales fell year over year in August and September before rates breached the 7% threshold. He said sellers have been compelled to lower prices, with the average price down 1.4% year over year and for-sale inventory up 5.4% year over year, while cash buyers are benefiting from the price declines.

Mortgage rates are influenced by several factors, including Federal Reserve policy and geopolitical developments, though they do not move directly with the Fed’s policy rate and tend to track the 10-year Treasury yield, which hovered around 5.22% on Thursday afternoon.