Mortgage rates surge, closing in on 7% | CNN Business

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Mortgage rates surged for the sixth week in a row, moving closer to 7%

The 30-year fixed-rate mortgage averaged 6.70% in the week ending September 29, up from 6.29% the week before, according to Freddie Mac. That’s the highest level since July 2007. Mortgage rates have more than doubled since the start of this year as inflation soared and led the Federal Reserve to hike borrowing costs. The central bank’s unprecedented campaign to fight inflation has concerned investors and roiled bond markets.

Mortgage rates tend to track the yield on 10-year US Treasury bonds. As investors see or anticipate rate hikes, they often sell government bonds, which sends yields higher and mortgage rates rise. This week, the 10-year Treasury touched 4%, a level not seen since 2008. The volatility seen in financial markets is an indicator of the uncertainty caused by the combination of resilient economic activity and expectations of decline in 2023, Ratiu said.

 

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