Mortgage Rates Climb to Their Highest Level Since 2023 as Bond Selloff Deepens

The cost of a home loan in the United States rose for a sixth straight week, pushing the average rate on a 30-year fixed mortgage to its highest level in nearly three years and putting homeownership further out of reach for many buyers.

The benchmark rate averaged 7.28 percent this week, up from 7.03 percent a week earlier and 6.34 percent a year ago, mortgage buyer Freddie Mac said on Thursday, according to the Associated Press. That is the highest reading since late November 2023, when the rate briefly touched 7.29 percent. The average rate on a 15-year fixed loan, popular with homeowners who refinance, rose to 6.60 percent from 6.42 percent.

The jump of a quarter of a percentage point in a single week was among the largest in several years. Daily rate surveys cited by NBC News put the average 30-year rate even higher, around 7.5 percent late Thursday.

Mortgage rates track the yield on the 10-year Treasury note, and the bond market has been under heavy pressure. The 10-year yield rose about 87 basis points over the July-to-September quarter, its steepest quarterly rise since 1994, according to LSEG data reported by Reuters. It briefly touched about 5.31 percent this week, a level not seen since 2007, while the 30-year Treasury yield climbed above 5.65 percent.

Both NBC News and Reuters tied much of the selloff to energy. Fuel costs have surged since the war with Iran began in late February; NBC reported that gasoline prices were about 47 percent higher than they were then, and diesel about 70 percent higher. Those costs are filtering into the broader economy. S&P Global reported that price pressures on businesses intensified in September at the fastest pace in four years, NBC said.

The Federal Reserve’s preferred inflation gauge came in somewhat cooler than forecast this week, with prices up 3.4 percent from a year earlier, but economists said a change in how the measure is calculated explained much of the gap. Traders have abandoned bets on rate cuts and are now pricing in further increases, both outlets reported. Diane Swonk, chief economist at KPMG, described the figures to NBC as cooler on paper and hot underneath.

Some analysts see a turning point. Andrew Lilley, chief rates strategist at the Sydney investment bank Barrenjoey, told Reuters the slump was a Treasury bear market that had to happen and said he believed the end was in sight. A dip in oil prices on Thursday helped steady markets.

For households, though, the arithmetic is unforgiving. Each step up in rates adds to monthly payments at a time when the number of unsold homes on the market has reached its highest level in more than a decade, according to NBC, a sign that many would-be buyers are simply waiting.