US mortgage rates hit highest level since 2023 as Treasury yields climb to 2002 highs

MixedUS mortgage rates have climbed to their highest level in nearly three years, as a selloff in the Treasury bond market pushed yields to levels not seen since 2002. 1 2 MixedNBC News reported that the 10-year Treasury yield rose as high as 5.34% in early trading on Thursday 1 October and the 30-year yield as high as 5.68%; Newsweek also put the 10-year yield at 5.34%, its highest since 2002. 1 2 MixedThe two outlets cite different mortgage figures. NBC News said the average 30-year fixed rate rose to 7.6% late Wednesday, the highest since late 2023. Newsweek, citing Freddie Mac, said the weekly average reached 7.28%, up from 7.03% a week earlier, the biggest one-week jump in four years and the sixth straight weekly rise. 1 2

MixedBoth link the rise in yields to energy prices driven by the Iran war, which began on 28 February. NBC said US gasoline was 47% higher than in late February and diesel up 70%, and cited S&P Global's report that business price pressures intensified in September at the fastest rate in four years. 1 2 CentreNewsweek added that the AI spending boom and a wave of corporate borrowing have increased competition for capital, also lifting yields. 2 MixedBoth note that the PCE inflation reading came in cooler than expected, with core PCE at 3.0%, but cite analysts who discount it. KPMG's Diane Swonk said the "measuring stick moved" while the inflation problem did not, and NerdWallet's Kate Wood said the bond market is "looking through" PCE because some improvement could stem from methodology changes. 1 2

MixedNBC reported that market odds showed about a 60% chance of a Fed rate hike at its early December meeting. Newsweek instead described softer data and dovish Fed comments as briefly lowering expectations for a rate cut this month, with Realtor.com's Hannah Jones saying all eyes were on the jobs report. 1 2 CentreNewsweek, published Friday, said the September jobs report showed weaker-than-expected growth of 29,000 net new jobs. The National Association of Realtors' Lawrence Yun said this, and a partial retreat in oil prices, could bring slight relief to mortgage rates. 2 CentreNewsweek calculated the cost to buyers: on a median-priced home (listing price $424,500 in August, per Realtor.com) with 20% down, buyers pay about $213 more per month than a year ago, when rates averaged 6.34%, or $2,552 a year. Against the 5.98% rate of late February, the extra cost is about $286 a month, or $3,432 a year. 2

LeftNBC also covered the policy response to fuel prices: President Trump said he was still weighing a ban on US diesel exports, which experts including some in his cabinet warned would raise prices, and the administration is urging European allies to release emergency diesel stockpiles. The European Commission said it would meet the International Energy Agency on Friday on diesel supplies. 1