U.S. mortgage rates are entering the new week close to 7% as higher Treasury yields and a surprisingly strong August jobs report increase uncertainty over the Federal Reserve’s next move. With U.S. fixed-income markets closed Monday, Sept. 7, for Labor Day, the latest broad mortgage-rate readings remain those published before the holiday weekend.
The mortgage daily index put the average top-tier 30-year fixed mortgage at 6.89% on Friday, Sept. 4, up one basis point from Thursday and close to the 6.91% level reached Wednesday. Its 15-year fixed rate stood at 6.49%, while the daily jumbo rate was 7.06%.
30-Year Mortgage Rate Climbs Toward 7%
Different mortgage surveys produce different rates because they use different methodologies and collection periods. Freddie Mac’s latest Primary Mortgage Market Survey showed the 30-year fixed rate averaging 6.71% as of Sept. 3, up from 6.66% the previous week and 6.50% a year earlier. The 15-year rate rose to 6.04% from 5.98%.
The Mortgage Bankers Association’s weekly survey, meanwhile, put the 30-year contract rate at 6.79%, up from 6.78%.
U.S. Mortgage Rates — One-Year Comparison. Source: Freddie Mac and Mortgage Bankers Association
The supplied one-year chart makes the direction clear. Mortgage rates fell toward the 6% area around March before reversing sharply. All three major measures have since trended higher, with Mortgage News Daily’s more responsive daily series now sitting closest to 7%.
The rise matters for housing affordability because even modest rate increases can materially raise monthly payments on large mortgages.
10-Year Treasury Yield Keeps Pressure on Mortgage Rates
The bond market remains the main issue for borrowers. Mortgage rates are influenced heavily by Treasury yields and mortgage-backed securities rather than moving directly with the Federal Reserve’s overnight policy rate.
The benchmark 10-year Treasury yield finished Friday at about 4.79%, after reaching as high as roughly 4.81% during the session.
U.S. 10-Year Treasury Yield Daily Chart. Source: TradingView
The supplied TradingView chart shows the 10-year yield near 4.784%, comfortably above its 50-day exponential moving average around 4.645%. The relative strength index is near 60, indicating positive yield momentum without showing an extreme overbought reading.
The chart also shows a broader series of higher lows and higher highs since the spring. As long as the 10-year yield remains elevated around 4.7%-4.8%, meaningful mortgage-rate relief may be difficult to sustain.
Strong Jobs Report Raises Fed Rate-Hike Risk
Friday’s employment report added another obstacle for borrowers hoping for lower rates.
U.S. employers added 162,000 jobs in August, far above the recent pace of job growth, while the unemployment rate remained at 4.1%, the Bureau of Labor Statistics said.
The strong report pushed Treasury yields higher and increased expectations that the Fed could raise interest rates at its Sept. 15-16 meeting. Futures markets were pricing roughly a 57% chance of a September hike after Friday’s trading, Reuters reported.
The Fed has kept its federal funds target at 3.50%-3.75%. At its July meeting, three policymakers favored a quarter-point increase.
Fed Gov. Christopher Waller said last week that continued improvement in inflation could justify holding rates steady, but a hotter August inflation report could make a rate increase appropriate.
Mortgage Rates This Week: Inflation Is the Next Big Test
That puts this week’s inflation data at the center of the mortgage-rate outlook. The August Producer Price Index is scheduled for Thursday, Sept. 10, followed by the Consumer Price Index on Friday, Sept. 11.
A softer inflation report could pull Treasury yields lower and give mortgage rates some breathing room. A hotter reading could reinforce expectations for another Fed increase and push 30-year mortgage rates more firmly toward, or above, 7%.
Borrowers have not disappeared, however. MBA data showed total mortgage applications rising 0.8% in the week ended Aug. 28, with purchase applications up 2%. Refinancing fell 1% and remained 19% below year-earlier levels.
Adjustable-rate mortgages are also attracting more interest: the ARM share climbed to 8%, its highest in five weeks, as MBA’s average adjustable rate fell to 5.94%.
For mortgage rates today, the key number remains the 10-year Treasury yield. Until bond yields retreat decisively, the broader pressure keeping 30-year borrowing costs near 7% is likely to remain in place.
