<\/p>\n
Mortgage rates have remained in focus for prospective borrowers, but recent moves in the bond market could make a decline harder to achieve. <\/p>\n
A global selloff in government debt pushed the 30-year U.S. Treasury yield above 5.31% on August 17, 2026, its highest since 2007, CNBC reported.<\/p>\n
The average 30-year fixed rate sits at 6.67% as of mid-August, barely moving from year-ago levels, Freddie Mac’s weekly survey shows.<\/p>\n
Homebuilding plunged in July, according to the Census Bureau, while pending sales slipped for a second consecutive month, the National Association of Realtors reported. Buyers who paused are still waiting for any sign of relief.<\/p>\n
Long-term Treasury yields just reached a 19-year high<\/p>\n
The 10-year Treasury note, the primary benchmark lenders use to price mortgages, settled near 4.72% on the same day of trading, while the 30-year long bond hit its highest reading since June 2007, CNBC reported.<\/p>\n
Three structural forces are fueling the rise in yields, and none appears likely to reverse before the end of this year. <\/p>\n
The federal government is issuing enormous volumes of new debt to fund persistent deficits, with July’s $432 billion setting a record for the month, according to the Treasury Department. <\/p>\n
It was the largest monthly deficit since March 2021, when COVID-19 relief spending was still running, Reuters reported. <\/p>\n
A wave of corporate bond issuance is also diverting investor capital from Treasuries, much of it funding AI infrastructure, CNBC reported.<\/p>\n
U.S. crude is above $85 per barrel, Brent above $90 per barrel, and tariffs on imports are keeping inflationary pressure on, with no deal in sight over the Strait of Hormuz.<\/p>\n
Anshul Pradhan, Managing Director and Head of US Rates Research at Barclays Capital, wrote in a client note that recent soft data has failed to bring yields down. <\/p>\n
These are not new forces, and the rise in long-term yields has been gradual rather than sudden. Three independent releases argued for lower yields this month; long end yields moved higher anyway<\/p>\n
The selloff extends beyond American borders, with Japan’s 10-year bond yield hitting a 30-year high, Reuters confirmed, and Germany’s 30-year yield reaching its highest level since 2011, Bloomberg reported.<\/p>\n
The gap between Treasury yields and mortgage rates remains wide<\/p>\n
Mortgage rates track the 10-year Treasury yield closely, though the two do not move in perfect lockstep due to differences in risk pricing.<\/p>\n
The 30-year fixed rate has historically averaged about 1.7 percentage points above the 10-year Treasury yield, First American Financial confirmed.<\/p>\n
More on Housing:<\/p>\n
Skyrocketing housing costs put huge strain on homeowners and renters<\/p>\n
Homebuyers lose ground as housing affordability slams shut<\/p>\n
Landlords sound alarm as rental fraud costs renters big<\/p>\n
The current spread sits at 2.01 percentage points as of early August, down from a June peak of 2.08% but still well above the pre-pandemic norm, according to mortgage rate tracker StreetStats. The gap has held above 1.9 points for more than three years.<\/p>\n
If the spread returned to its historical average of 1.7 percentage points, the 30-year fixed rate would sit closer to 6.42% than today’s 6.67%. <\/p>\n
On a $400,000 mortgage, that 25-basis-point gap translates to roughly $65 per month, or about $23,400 over the life of the loan, which the borrower absorbs because the spread has not normalized.<\/p>\n
The gap between Treasury yields and mortgage rates remains wider than normal, keeping borrowing costs higher for homebuyers.<\/p>\n
Drazen Zigic \/ Getty Images<\/p>\n
Homebuilding and pending sales are feeling the strain from higher rates<\/p>\n
Higher borrowing costs are already showing up in housing data, and the July figures showed a sharp pullback in both construction activity and buyer demand. <\/p>\n
Total housing starts fell 12.4% from June to July, dropping to a seasonally adjusted annual pace of 1.239 million units, the Census Bureau reported.<\/p>\n
Pending home sales fell 2.3% in July from the prior month, marking the second straight monthly drop, the National Association of Realtors reported.<\/p>\n
“The highest mortgage rates of the year hit right in the middle of summer, and that’s pulling back contract signings,” Lawrence Yun, Chief Economist at the National Association of Realtors, said.<\/p>\n
Building permits rose 5% in July, a sign that firms are preparing for future demand, but few are breaking ground while costs stay elevated, the Census Bureau showed.<\/p>\n
“Builders are keeping projects moving, but they’re not ready to bet on them yet,” Odeta Kushi, deputy chief economist at First American, said in a statement following the release.<\/p>\n
Forecasters see mid-6% rates lasting into 2027<\/p>\n
Every major housing forecaster projects the 30-year fixed rate will stay above 6% through the rest of 2026 and most of 2027.<\/p>\n
Even the most optimistic projection from the National Association of Home Builders (NAHB) carries a significant caveat about the timeline for meaningful rate relief for homebuyers. <\/p>\n
NAHB economist Eric Lynch cautioned in a June update that rates will not sit consistently below 6% until late 2027, U.S. News reported.<\/p>\n
Inflation from the Middle East conflict could push consumer prices above 4% and hold yields elevated for the next year, the Mortgage Bankers Association (MBA) warned.<\/p>\n
What the bond selloff means for your next mortgage decision<\/p>\n
Waiting for rates to drop has a measurable cost. On a $400,000 loan, the difference between today’s 6.67% and a forecast late-2027 rate near 6.25% is roughly $110 per month, or about $1,320 a year. <\/p>\n
Home prices are projected to rise 2%–3% annually through that window, meaning a buyer who waits 18 months on a $400,000 home could face $12,000–$18,000 in added price before any rate benefit lands.<\/p>\n
Refinancers face a different calculation: with the spread stuck near 2%, a Fed cut won’t move mortgage rates one-for-one. The break-even point depends less on where rates go than on how long the buyer plans to stay.<\/p>\n
Related: Fannie Mae revamps mortgage rate forecast<\/p>\n
#mortgage #rate #growing #problem #bond #market<\/p>\n","protected":false},"excerpt":{"rendered":"
Mortgage rates have remained in focus for prospective borrowers, but recent moves in the bond…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[259],"tags":[1286,3094,33,1952,823,126],"_links":{"self":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/14320"}],"collection":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14320"}],"version-history":[{"count":0,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/14320\/revisions"}],"wp:attachment":[{"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14320"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14320"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14320"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}