Mortgage Rates Hit 7.45% Thursday, the Highest Since April 2024, as Treasury Yields Spike With No Clear Explanation

Since the Federal Reserve raised its benchmark rate to 3.75%-4% last week, mortgage borrowers have felt it fast. The average 30-year fixed mortgage rate hit 7.45% on Thursday, according to Mortgage News Daily's daily index, the highest level since April 2024.

That's up 19 basis points from 7.26% the day before, according to Matthew Graham, chief operating officer at Mortgage News Daily. Rates moved higher Thursday morning during the firm's regular broker survey, then Mortgage News Daily re-ran the numbers in the afternoon after the 10-year Treasury yield kept climbing, and found rates had jumped again.

"A combination of Fed comments, higher oil prices, and stronger economic data have added to the pain since" September 10, Graham said, the date daily rates first broke 7% following inflation reports that raised the odds of last week's Fed hike.

Several outlets reported Thursday morning that mortgage rates had "just crossed 7%," citing Freddie Mac's weekly survey, which came in at 7.03%, up from 6.95% the prior week, according to Newsday. Graham pushed back hard on that framing. Freddie's number is an average of rates from the prior Wednesday through Wednesday, meaning it hasn't even captured what happened this week, let alone Thursday's spike. Borrowers calling a lender Thursday afternoon were quoted far closer to 7.45%, not 7.03%.

Why the Bond Market Sold Off Is Genuinely Unclear

What's new and unresolved here is Thursday's afternoon Treasury selloff. Graham described it plainly: "No obvious catalyst. Explanations require concocting narratives and then defending them. There's no objective, irrefutable way to connect the dots today. Sellers decided to sell... a lot."

This means the jump isn't tied to a single Fed statement or economic report Thursday. It's a broader bond market move that outpaced the news cycle.

The 10-year Treasury yield climbed above 5.1% this week for the first time since July 2007, according to Newsday, which cited Bloomberg reporting that yields rose after news that U.S. business activity grew at its fastest pace in five years. Yields have been climbing since the war with Iran began, driving up energy prices and feeding faster-than-expected inflation, Newsday reported.

Real Cost to Buyers

A $500,000 mortgage at this week's Freddie Mac average of 7.03% runs $3,337 a month in principal and interest, up from $3,095 a year ago at 6.3%, according to a Newsday analysis using Bankrate's calculator. That's an extra $242 a month for the exact same loan.

Applications are already responding. The Mortgage Bankers Association reported purchase applications down 11% for the week ending September 18 compared with a year earlier. Refinance applications have slowed to their weakest weekly pace since May 2025, according to Joel Kan, the MBA's deputy chief economist, who also said more borrowers are shifting into adjustable-rate mortgages to dodge the higher fixed rate.

Greg Parmiter, chief business development officer at Reliant Home Funding in Melville, New York, said crossing the psychological 7% line matters even if it doesn't immediately scare off buyers. "The general public does look at those fat round numbers and take them to heart," he said. Parmiter added he doesn't expect the rate spike to crash home prices on Long Island, where median sale prices hit records of $911,000 in Nassau County and $760,000 in Suffolk County last month, because tight inventory is doing more to prop up prices than high rates are doing to suppress demand.

The 30-year fixed rate had fallen as low as 5.99% at the end of February before climbing steadily through the Iran war and again after the Fed's rate decision. Whether that climb has topped out depends on next week's economic data and whether the bond market's unexplained Thursday selloff was a one-off or the start of another leg higher. Graham gave no forecast on that Thursday, only a description of what already happened: sellers sold, and buyers of homes are the ones now paying for it.