Mortgage Rates Hit New 3-Year High as Fed Official Says More Hikes Are Needed

Mortgage rates climbed to a fresh three-year peak this week, propelled upward by a toxic blend of inflation fears, a global bond selloff, and rising concerns about government deficits. The average rate on 30-year fixed home loans reached 7.40% for the week ending Oct. 8, up 12 basis points from 7.28% the previous week, according to Freddie Mac. For perspective, rates averaged 6.30% one year ago."As market conditions continue to evolve, borrowers should remember that shopping around for a mortgage rate and getting multiple quotes can potentially save them thousands over the loan’s lifetime," says Sam Khater, Freddie Mac's chief economist.Two weeks ago, the average mortgage rate crossed the 7% threshold for the first time in 19 months. Thursday’s print hits its highest level since mid-November 2023.Mortgage rates have now been on an upward trajectory for seven consecutive weeks, mirroring the ascent of the 10-year Treasury yield, which averaged 5.28% this week, up 9 basis points from the week before. The yield has been driven up by falling bond prices resulting from macroeconomic pressures across major global economies tied to spikes in energy prices and inflation, ballooning nationa...