10-year Treasury yield reaches highest level since July 2007

The 30-year fixed mortgage rate, the most common US home loan, typically tracks the 10-year Treasury yield, which The Guardian reported underpins the 30-year mortgage rate and other borrowing costs. That yield climbed to 4.96% on September 24, according to Federal Reserve data — its highest level since July 2007 — as investors raised expectations for another Federal Reserve rate hike after the central bank’s September 16 decision. The 30-year Treasury yield separately hit a peak not seen since 2004.

In that September 16 decision, the Fed’s rate-setting committee raised the benchmark federal funds rate by a quarter-point to a range of 3.75% to 4%, its first increase since 2023. Fed officials cited elevated inflation as the trigger, and most committee members projected at least one additional hike before the end of this year.

Inflation has climbed to its highest level in three years, driven by energy prices since the US and Israel launched their war with Iran in late February, according to The Guardian. Brent crude, the international oil benchmark, topped $105 earlier on Thursday, the publication reported. US Treasury Secretary Scott Bessent announced earlier in September that the Treasury would triple its buyback of government debt, but yields have continued to climb.

The mortgage rate’s return above 7% lands on a housing market Realtor.com’s Smith described as already in a long-running slowdown, with existing home sales at their 2026 low in August and pending sales turned negative year over year. “A 7% handle is as much psychological as mathematical, and it arrives at the point in the season when leverage usually shifts toward buyers,” Smith said.

High mortgage rates are one of several pressures on would-be homebuyers, according to The Guardian, which reported that wage growth has not kept pace with inflation and that everyday costs remain elevated. The 7% return lands ahead of November’s midterm elections: a CNN poll conducted by SSRS found nearly three-quarters of Americans disapprove of Trump’s handling of the economy, and two-thirds of registered voters rated the economy as “extremely important” to their vote.

The mortgage rate had been trending down last year from a generational high of 7.79% reached in late 2023, according to Freddie Mac data, before reversing course in late February.