Mortgage rates are at their highest point in nearly three years as turmoil in the bond market continues.U.S.Treasury bonds continued selling off on Thursday, driving yields on the most closely watched bonds to their highest levels since 2002.The yield on the 10-year Treasury rose as high as 5.34% in early trading, while the 30-year yield spiked to as high as 5.68%.
As bonds sell off, their yields rise.As a result of the surge in the 10-year yield, U.S.mortgage rates are also soaring.
Late Wednesday, the average 30-year fixed mortgage rate rose to 7.6%, the highest it has been since late 2023.Yields are spiking for a number of reasons, but a major driver is inflation stemming from rising energy prices as a result of the wars in Iran and Ukraine.On Thursday, the average regular gas price in the U.S.
remained 47% higher than it was in late February when the Iran war began.At the same time, diesel prices have soared 70% over the same period of time.
While diesel is not often used by consumers, it is used widely in the shipping and farming sectors, meaning that higher fuel costs can easily trickle down to store shelves.Last week, S&P Global reported that “price pressures intensified in September” for businesses at the fastest rate in four years.President Donald Trump on Wednesday said he was still considering whether he would ban U.S.exports of the critical fuel.
However, experts, including some in his own cabinet, have warned that a ban would only drive up prices.A recent ban on exports of diesel from Russia has been widely cited by commodities experts as a major contributor to diesel’s recent all-time highs.The Trump administration is also urging European allies, such as Germany and France, to release their emergency diesel stockpiles in another attempt to cut prices.
“I spoke with my French counterpart yesterday,” U.S.Trade Representative Jamieson Greer told Bloomberg on Thursday morning.
“I let him know that this is an idea we’ve had in the U...