Mortgage rates rose sharply Thursday, as bond yields surged, with the average rate on the 30-year fixed hitting 7.45%, according to Mortgage News Daily. While other outlets, like Freddie Mac, reported Thursday morning that the rate had just crossed 7%, that report was an average of the last week.
Rates rose Thursday morning, when Mortgage News Daily ran its daily survey of brokers and lenders, but as the yield on the 10-year Treasury moved even higher in the afternoon, it re-ran its survey and found rates had moved even higher. Since the day before, they were up 19 basis points, from 7.26%
"In daily terms, 7% was first broken back on September 10th following inflation reports that raised the risk of the Fed rate hike seen last week," wrote Matthew Graham, chief operating officer at Mortgage News Daily. "A combination of Fed comments, higher oil prices, and stronger economic data have added to the pain since then."
CNBC's Property Play with Diana Olick covers new and evolving opportunities for the real estate investor, delivered weekly to your inbox.
The 30-year fixed sunk as low as 5.99% at the end of February, but began rising at the start of the war with Iran. Rates began moving even higher again at the start of September, especially after the Federal Reserve raised its benchmark rate. Mortgage rates loosely follow the yield on the 10-year U.S. Treasury.
This all comes as the housing market continues to struggle with high home prices, weak consumer confidence and still lean supply of affordable homes.
While there were reasons for this morning's move higher, this afternoon's bond selloff is puzzling.
"No obvious catalyst. Explanations require concocting narratives and then defending them. There's no objective, irrefutable way to connect the dots today. Sellers decided to sell... a lot," said Graham.
Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.