Mortgage Rates Soar to 3-Year High as Global Bond Market Selloff Deepens

Mortgage rates jumped to their highest level in nearly three years this week, driven by a massive global bond market selloff stemming from rising energy costs and lingering inflation fears.The average rate on 30-year fixed home loans climbed to 7.28% mark for the week ending Oct. 1, up 25 basis points from 7.03% the previous week, according to Freddie Mac. For perspective, rates averaged 6.34% one year ago."With mortgage rates on their current trajectory, the housing market continues to be supported by favorable economic conditions," says Sam Khater, Freddie Mac's chief economist.Last week, the average rate crossed the 7% threshold for the first time in 19 months. Thursday’s readout hits its highest level since late Nov. 2023, and marks the biggest one-week increase in more than four years.This comes as the 10-year Treasury yield, which mortgage rates closely follow, on Thursday touched 5.34%, a level not seen since April 2002, fueled by rising oil prices from the ongoing conflict in the Middle East, expectations of growing inflation, and concerns about rising federal deficits. The August Personal Consumption Expenditures (PCE) inflation came in cooler than expected Wednesday, with...