30-Year Fixed Mortgage Rates Hit 7.49% as 10-Year Treasury Yield Reaches 5.34% on Global Bond Selloff

Mortgage Bankers Association data show applications fell 4.2% last week, with refinancing volume at its lowest since February 2025 and overall purchase activity down nearly 50% since January. Rates have risen roughly 1.4 percentage points since US-Israeli strikes on Iran began in late February, aligning with Brent crude above $101 and the 10-year yield posting its largest quarterly gain since 1994. On a $400,000 loan, monthly principal and interest now stand at $2,794 versus $2,424 at 6.1%, widening the gap that reinforces the lock-in effect for homeowners holding sub-4% mortgages.

Global duration demand has collapsed. Japanese investors repatriate as domestic long yields near record highs, UK 30-year gilts reached 28-year peaks, and French OAT-Bund spreads widened to 140 basis points. The US Treasury must absorb record supply alongside corporate AI-related issuance while foreign participation at recent auctions has slumped. This shifts the marginal price of duration onto domestic borrowers rather than overseas buyers.

Housing inventory gains recorded over the summer have reversed as sellers with low-rate mortgages stay put. Real estate agents reported showings halting after Freddie Mac's 30-year rate jumped to 7.28%. The pattern matches prior rate spikes where purchase applications contract sharply once the 10-year exceeds 5% for sustained periods.

Absent a reversal in oil prices or a documented reduction in Treasury issuance, yields are positioned to test 5.5% before year-end, extending the affordability constraint into 2026 and further compressing transaction volumes below 2024 levels.