The past week has been marked by extreme volatility in financial markets, including the US bond market. The 10-year Treasury, a benchmark for the US bond market, saw its largest weekly increase since 1981.
Mortgage rates are closely tied to the performance of the US bond market, as mortgage-backed bonds share similarities with government bonds. As a result, investors’ concerns about changes in interest rates and policy uncertainty have led to a surge in mortgage rates. The relationship between bond yields and mortgage rates is well-established, with a “yield” referring to the rate paid by a bond.
The recent move in the US bond market has been driven by a broad shift in investor demand for Treasury bonds. Rather than delving into complex explanations of market structures, the key takeaway is that investors are increasingly uncertain about the impact of policy changes on the market.
In the mortgage sector, while individual days and weeks have seen worse fluctuations, this week’s rate spike is notable. Average lenders have increased rates by roughly 0.125% today, with top-tier conventional 30-year fixed rates reaching 7.125%. This represents a half-percent increase from last Friday and marks the largest weekly jump since early 2022.
Source: https://www.mortgagenewsdaily.com/markets/mortgage-rates-04112025