🕒 Created · Updated

Mark Zandi Predicts Mortgage Rates May Rise Above 7% as Bond Market Turmoil Drives Up Borrowing Costs

Mortgage rates have reached their highest level in 13 months, with the average 30-year fixed-rate mortgage rising to 6.71% this week. This increase is driven by a global bond sell-off caused by heightened inflation concerns, specifically regarding rising energy prices and swelling U.S. government debt. Economists indicate that mortgage rates closely track the 10-year Treasury yield, which has jumped from 4.08% to 4.77% over the last six months. Mark Zandi, chief economist at Moody's Analytics, stated that rates could easily go over 7%, a level not seen since January 2025. While some borrowers are already seeing quotes at or above 7%, experts suggest that higher rates may reduce competition among buyers, potentially offering more leverage to those who can afford the payments. Market analysts also point to the ongoing war against Iran as a factor contributing to inflation fears. While rates were expected to be lower this summer, the conflict has pushed costs higher. Experts recommend that homebuyers focus on their monthly budgets rather than waiting for lower rates, as demand remains steady among millennials reaching homeownership milestones.

Sources

Paywall and unreadable sources