Mortgage Rates Surge to 8% Amidst Falling Demand and Rising Treasury Yields

The average rate on the 30-year fixed mortgage has reached 8%, the highest level since 2000, as bond yields surge to levels not seen since 2007. Mortgage rates tend to follow the yield on the 10-year U.S. Treasury. The increase in rates has caused mortgage demand to plummet, with applications falling nearly 7% last week. Homebuilders are using buydowns to help customers afford homes, making it the top incentive among builders. The average rate on the 30-year fixed was as low as 3% just two years ago, resulting in significantly higher monthly payments for buyers today.