Mortgage rates move closer to 7 percent as bond yields fall

United States housing demand stabilized over the past two weeks as mortgage rates moved closer to 7 percent, HousingWire reported. The shift occurred after the 10-year Treasury yield dropped below 5 percent and avoided a surge above a critical technical threshold. [1]

HousingWire reported that bond markets avoided a dangerous selling cycle in October. The 10-year Treasury yield held below 5.35 percent, which prevented mortgage rates from climbing above 8 percent. Yields subsequently moved below 5 percent, opening a potential path for mortgage rates to fall below 7 percent. [1]

The modest drop in rates over the last two weeks immediately stabilized demand in weekly pending home sales data, according to HousingWire. Market indicators suggest that borrowing costs are currently positioned significantly closer to 7 percent than to 8 percent. [1]

The yield movement follows broader central bank policy discussions. As FTMQ Real Estate reported earlier, Federal Reserve Governor Christopher Waller previously indicated that additional interest rate hikes would be needed to bring inflation down to the official 2 percent target. [2]