30-year mortgage rate posts biggest jump in four years

By Aarthi Swaminathan

The 30-year mortgage rate jumped to roughly a three-year high

High borrowing rates are putting pressure on home prices, leading sellers to cut asking prices in many areas across the United States.

Mortgage rates surged to roughly a three-year high, a fresh setback for an already depressed housing market.

The 30-year mortgage rate posted the biggest one-week jump in four years, rising to 7.28% from 7.03% on Thursday, according to data from Freddie Mac.

The 30-year mortgage rate is at the highest level since November 2023.

Mortgage rates are up because the yield on the 10-year Treasury note is at its highest level in over two decades. Mortgage rates don't directly follow along with the Federal Reserve's benchmark short-term interest rate. Instead, they tend to move in tandem with the yield on the 10-year note BX:TMUBMUSD10Y.

High borrowing rates are putting pressure on home prices.

"It is clear that higher rates this fall are leading to a pullback in demand. Sellers are having to adjust their pricing expectations and offer more concessions to buyers," Lisa Sturtevant, chief economist at Bright MLS, said in a statement.

At the same time, a home-price crash isn't about to materialize, she stressed.

The so-called lock-in effect, where people hold on to ultralow-rate mortgages obtained during the pandemic, "is creating a supply floor which will keep inventory from exploding and will keep prices from dropping dramatically," she said.

"In addition, demand from high-income and cash buyers remains relatively resilient, for now, at least, so the overall median home price may still increase this fall," she added.

-Aarthi Swaminathan

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

10-01-26 1206ET