Mortgage rates hit 7.50% in a daily index, the first time since April 2024; the 10-year is at 5.24%

The average lender's top-tier 30-year fixed mortgage rate rose to 7.50% on Monday, according to Mortgage News Daily, the first reading at that level since April 30, 2024. The index rose 0.07 of a point from Friday's 7.43%, and it now sits at the top of its 52-week range, which runs from 5.99% to 7.50%.

The move tracked the bond market. The 10-year Treasury yield closed at 5.24% on Monday, up from 5.17% on Friday, and the 2-year rose to 4.92% from 4.81%, according to Treasury data.

It is not really about oil

The easy read on Monday was that rising oil prices pushed rates up. Mortgage News Daily's Matthew Graham argued against that: oil fell back to Friday afternoon's level at one point in the session while rates stayed high, and he wrote that oil "does a poor job of explaining much of the recent upward momentum in rates." His list of other causes was the usual one, strong economic data, worry that the next data will be stronger, and heavy supply in the Treasury market, but he noted no major new development on any of them on Monday. In other words, this was a continuation of a trend rather than a reaction to one headline.

What it costs

Principal and interest on a $400,000, 30-year loan, using Mortgage News Daily's daily index. These are our calculations, before taxes and insurance:

The index is up 1.12 points from a year ago. Freddie Mac's weekly survey, which most headlines quote, was 7.03% last Thursday and lags the daily series; its next reading is due this Thursday, Oct. 1.

The escape hatches are narrower

The number the headline leaves out is how little the alternatives now save. In Mortgage News Daily's table on Monday:

• 15-year fixed: 7.12%, only 0.38 of a point below the 30-year. On $400,000 the payment is about $3,622, roughly $825 a month more than the 30-year, for a rate discount that barely registers.
• 7/6 SOFR ARM: 6.85%, 0.65 below the 30-year. That saves about $176 a month on $400,000, but only the first seven years are fixed, and the rate then floats with SOFR, a short-term rate that follows the Fed.
• FHA 7.17% and VA 7.19%, both up 0.36 of a point in a week, so government-backed loans are moving with the rest of the market rather than insulating first-time buyers.

Who it hits

The most exposed borrower is someone under contract for an October or November closing who has not locked. A month ago their payment on $400,000 would have been about $2,610; today it is about $2,797. That $187 a month can push a debt-to-income ratio past a lender's limit even when nothing else in the application has changed.

The businesses that live on sales volume feel it next. CheckThisBiz lists 42,966 independent moving companies and 141,913 independent construction firms and contractors, and both depend on people buying and remodeling homes. Rates at their highest since April 2024 usually mean fewer listings from owners holding cheaper mortgages. The 10-year Treasury is the rate to watch for where mortgages go next; follow it on our 10-year chart. We covered last week's Freddie Mac reading in this story.

Sources: Mortgage News Daily rate index; Freddie Mac; U.S. Treasury. Payment figures are Chronicle calculations. This is market information, not investment advice.