United States Mortgage Rates Soar to 7.28%, Biggest Increase in Four Years

【Financial News, New York = Lee Byung-chul, Correspondent】 United States mortgage rates surged by 0.25 percentage points in just one week, marking their largest increase in four years. As U.S. Treasury yields soar to their highest level in more than 20 years, the shock in the bond market is rapidly spreading to the housing market. With home prices also near record highs and mortgage rates once again well above 7%, concerns are growing that the recovery of the frozen U.S. housing market will be delayed further.
 According to Freddie Mac, a U.S. government-sponsored mortgage institution, the 30-year fixed mortgage rate in the United States rose to 7.28% this week from 7.03% the previous week, an increase of 0.25 percentage points. It was the largest weekly increase since October 2022. Mortgage rates have risen to their highest level since 2023.
 The direct catalyst for the surge in mortgage rates is the U.S. Treasury market. Treasury yields are rising sharply as concerns over inflation, ballooning government debt, and companies’ massive fundraising efforts to build artificial intelligence infrastructure converge. The yield on the 10-year U.S. Treasury note, which serves as a benchmark for mortgage rates, soared to its highest level in more than 20 years that day.
At the beginning of this year, mortgage rates briefly fell below 6%. However, they began rising again as concerns over prolonged inflation intensified after the Iran war began. The 30-year fixed mortgage rate, which stood at 6.71% in early September, climbed to 7.28% in just one month amid the recent sell-off in the Treasury market.
The impact of high interest rates is already being felt in home sales. According to the Mortgage Bankers Association (MBA), mortgage applications for the week ending on the 25th of last month fell 6% from the previous week. It was the fourth consecutive weekly decline.
Rising mortgage rates could also reignite the “lock-in effect,” which had recently shown signs of easing. This refers to existing homeowners’ reluctance to sell because they do not want to give up mortgages secured at low rates of 2% to 4% in previous years.
As more homeowners gave up their low-rate mortgages because of family circumstances or job changes, the housing inventory in August approached pre-pandemic levels. However, with rates once again well above 7%, sellers are increasingly likely to withdraw their listings.




[email protected] Lee Byung-chul, Correspondent Reporter