Mortgage rates reach 7.58%, the highest since November 2023, while the 10-year sits at a 2007 high
Every loan type in Mortgage News Daily's table is at a 52-week high. The gap between mortgage rates and Treasuries has narrowed by about half a point since 2023, which is why mortgages are not worse.
The average top-tier 30-year fixed mortgage rate rose to 7.58% on Tuesday from 7.50% on Monday, according to Mortgage News Daily, its highest level since Nov. 1, 2023. The 10-year Treasury yield closed at 5.26%, up from 5.24%, according to Treasury data. CNBC reported the 10-year touched 5.293% during the day, its highest since 2007.
Why mortgages are "only" at a 2023 high
The two headlines look inconsistent: the benchmark is at a 19-year high, but mortgage rates are only at a three-year high. The difference is the spread between them, and it has shrunk.
On Nov. 1, 2023, the last time the index was this high, the 10-year closed at 4.77%. Since Mortgage News Daily says today's 7.58% is the highest since that date, the spread over the 10-year then was at least 2.81 points. Today it is 2.32 points (7.58% minus 5.26%). By our calculation, roughly half a point of the Treasury selloff has been absorbed rather than passed through to borrowers.
Mortgage News Daily's Matthew Graham attributes this to mortgage-backed securities outperforming Treasuries relative to 2023, since lenders price off MBS rather than the 10-year directly. He also pointed to quarter-end trading as part of the recent pressure, and said a new month could restore a more normal link between news and rates, though not necessarily a reversal. Wednesday is the last day of the quarter.
Every product is at its 52-week high
| Loan | Rate Sept. 29 | Change on day | 52-week low |
|---|---|---|---|
| 30-year fixed | 7.58% | +0.08 | 5.99% |
| 15-year fixed | 7.20% | +0.08 | 5.55% |
| 30-year jumbo | 7.60% | +0.04 | 6.10% |
| 7/6 SOFR ARM | 6.87% | +0.02 | 5.29% |
| 30-year FHA | 7.24% | +0.07 | 5.62% |
| 30-year VA | 7.25% | +0.06 | 5.64% |
The jumbo premium has nearly disappeared: at 7.60%, a jumbo loan costs just 0.02 of a point more than a conforming one.
What it costs
Principal and interest on a $400,000, 30-year loan, our calculations before taxes and insurance:
- At 7.58%: about $2,819 a month, $22 more than at Monday's 7.50%.
- Against Freddie Mac's 7.03% weekly reading from last Thursday, the widely quoted weekly survey: about $150 a month more. Freddie Mac's next survey is due Thursday, Oct. 1.
- Against the 52-week low of 5.99%: about $423 a month more.
- The ARM at 6.87% saves about $192 a month on the same loan, with the rate fixed for seven years and floating with SOFR after that.
Who it hits
Buyers under contract for an October or November closing who have not locked face the move most directly, since a rate set at closing rather than at contract can push a debt-to-income ratio over a lender's limit. Movers feel the volume effect next: CheckThisBiz lists 42,966 independent moving companies whose work depends on homes changing hands. The next inputs are Wednesday's August PCE inflation report, covered in our preview, and Friday's jobs report. Follow the benchmark on our 10-year chart, and see Monday's story on the 7.50% reading.
Sources: Mortgage News Daily; U.S. Treasury; Freddie Mac; CNBC. Spread and payment figures are Chronicle calculations. This is market information, not investment advice.
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