Insights and Analysis: Mortgage and Real Estate Capital Markets Update with Jeff Rosato, SVP of Capital Markets at NMB NOW.
Key Takeaways
Mortgage rates continued to rise, with the Freddie Mac average 30-year fixed mortgage rate reaching 6.76% and the 10-year Treasury yield climbing to 4.99%. Renewed inflation concerns driven by higher energy costs and a fresh spike in oil prices have put additional pressure on Treasury yields and mortgage rates. With the Federal Reserve’s upcoming rate decision and economic projections in focus, markets remain highly sensitive to inflation expectations, energy prices, and future monetary policy. Mortgage rates are expected to remain elevated as borrowers and loan officers navigate a challenging interest-rate environment.
Here’s a look at this week’s update on the major bond market indices, scheduled Federal Reserve meetings, upcoming market-moving economic data releases, and general bond market trends.
Bond Market Indices
“The expectation is for the Fed to hike is benchmark rate by .25% this week at the conclusion of their meeting. The decision will be followed by Chairman Warsh’s press conference.”
Market Overview and Rate Trends
The Freddie Mac average 30-year fixed rate is at 6.76% and was up by another 5 basis points compared to the prior week. That puts the max APR this week for 30-year fixed-rate loans at roughly 8.26% (6.76 + 1.50). The 10-Year Treasury yield closed at 4.99%, which was up very sharply by 19 basis points for the week.
Treasury yields and mortgage rates continued to climb. It’s a very unfriendly environment out there for borrowers and loan officers. The 10-year Treasury yield is pushing up against 5.0%, and average 30-year fixed-rate mortgage rates are at their highest since the beginning of 2025.
Renewed inflation fears due to high energy costs are driving the move higher in rates. Renewed hostilities in the conflict with Iran have caused a fresh spike in oil prices to over $100 per barrel. Just a month ago, energy prices were easing and it appeared that inflationary pressures due to high oil prices were fading. The fresh spike in oil and rates has reignited those inflationary fears and complicates the FOMC’s rate decision.
The expectation is for the Fed to hike its benchmark rate by .25% at the conclusion of its meeting. The decision will be followed by Chairman Warsh’s press conference. With this rate decision, the Fed will also be publishing its summary of economic projections, which shows where the committee sees rates out into the future.
Because the rate hike is widely expected, it has been baked into the current MBS and Treasury markets. If the Fed does hike the rate, then we could see a small relief rally in the bond market as it may be oversold.
Federal Reserve Outlook and Economic Calendar
Aside from the FOMC meeting, the economic calendar is light, with no other market-moving reports expected. We should expect mortgage rates to remain elevated at current levels.
So far, MBS prices are down slightly by about 10-15 basis points compared to where they closed previously, and the 10-year Treasury is flat at 4.99%.
Looking Ahead
Mortgage rates and Treasury yields remain under pressure as markets navigate renewed inflation concerns, elevated energy prices, and expectations surrounding Federal Reserve policy. With rates near recent highs, borrowers and real estate professionals should remain focused on market trends and be prepared for continued volatility.
Stay tuned each week for the latest insights on mortgage rates, the bond market, Federal Reserve policy, and the economic factors shaping today’s housing market.
