Mortgage misery for homeowners as bond market turmoil to send rates climbing
Borrowers should brace themselves for another wave of painful mortgage rate hikes, experts have warned.
Mortgage rates recently surpassed the 7% threshold for the first time in more than a year. This increase occurred due to several factors, including rising oil prices, hot wholesale inflation, and President Trump's promise to give $5,000 to every adult if Republicans maintain control of Congress in November. These developments have heightened the bond market selloff.
The 10-year Treasury yield, which closely tracks mortgage rates, surged to a multi-year high, with a 10 basis point jump from the previous day. The Treasury Department attempted to stabilize yields with larger bond buybacks, but their efforts had little effect. Concerns about inflation have grown after oil prices reached $100 a barrel for the first time since May, as tensions between the US and Iran escalated. Higher oil prices lead to increased inflation fears, causing bond markets to reprice accordingly.
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