Why Are Mortgage Rates So High, and How Long Will They Stay Up?
Summary
The biggest driver is the bond market, but there’s more to it than that, said Melissa Cohn, regional vice president at William Raveis Mortgage, a real estate lender. The yield on the 10-year Treasury note recently hit its highest point since 2007, climbing to 4.3 percent, reflecting the Federal Reserve’s efforts to tame inflation by pushing borrowing costs higher. To stay competitive with the 10-year Treasury bond, lenders need to increase the yields on their mortgage-backed securities, which means higher rates for home loans. Right now, the difference is more like three percentage points, which has a big effect on the housing market by pushing mortgage rates higher, said Lawrence Yun, the chief economist at the National Association of Realtors. It may seem that home buyers have little wiggle room, but there are things they can do to nab a lower rate, Ms. Cohn of William Raveis Mortgage said.