US 30-Year Mortgage Rate Hits 7.49%, a Nearly Three-Year High, as Treasury Yields Surge to 2002 Levels

The average 30-year fixed mortgage rate climbed 19 basis points to 7.49% for the week ending October 2, its highest level since November 2023, according to Mortgage Bankers Association data released October 7. The rate has now risen roughly 1.4 percentage points since late February, extending a sustained squeeze on housing affordability. The contract rate has increased for seven consecutive weeks.

The surge in mortgage costs is directly tied to a parallel selloff in the Treasury market. The benchmark 10-year Treasury yield reached 5.35%, its highest level since 2002, while the 30-year bond yield climbed to 5.724%, also a 24-year high. The bond rout is global, with yields in Japan, the UK, France, Germany, Australia, and Canada simultaneously hitting multi-decade highs across maturities.

Despite the elevated rate environment, the Treasury's auction of $39 billion in 10-year notes drew strong demand. The notes cleared at a high yield of 5.300%, stopping through the pre-auction when-issued yield of 5.317% by 1.7 basis points, the fifth consecutive stop-through and the highest auction yield since November 2000. Indirect bidders, largely foreign institutions, took 80.34% of the offering, while primary dealers were left with just 2.54%, a sign of robust end-investor appetite. The 10-year yield pulled back from 5.365% to around 5.271% following the auction result.

The impact on housing is measurable. MBA mortgage applications fell 4.2% for the week, an improvement from the prior week's 6.0% decline but still reflecting retreating borrower demand. The MBA Purchase Index dropped to 145.1 from 148.2, the Mortgage Market Index fell to 204.7 from 213.6, and the Refinance Index slid to 515.8 from 557.8 as higher financing costs pushed would-be refinancers to the sidelines. RPM International CEO Frank Sullivan noted US housing turnover is at a 40-year low and sees no near-term improvement, while RBC turned cautious on building products as the housing recovery fades. A separate report showed mortgages of $100,000 or less now account for less than 3% of US home loans, down from more than 12% in 2013-14, further narrowing options for lower-cost buyers.