A sudden bond market selloff pushed the average rate on the 30-year fixed mortgage to 7.45% on Thursday. Mortgage rates jumped 19 basis points in a single day, rising from 7.26% as the 10-year U.S. Treasury yield climbed throughout the afternoon. Freddie Mac had reported Thursday morning that the rate had just crossed 7%, but that figure reflected a weekly average rather than the intraday spike captured by Mortgage News Daily.

Mortgage rates generally track the 10-year U.S. Treasury, and this latest move follows a steady upward trend since the end of February. The average rate bottomed at 5.99% that month before climbing at the start of the war with Iran. The pace of increases accelerated at the start of September, particularly after the Federal Reserve raised its benchmark rate.

The housing market is currently navigating high home prices, weak consumer confidence, and a lean supply of affordable homes. These structural challenges make the rapid rate increase especially difficult for buyers already facing tight conditions.

"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," said Matthew Graham, chief operating officer at Mortgage News Daily. Graham pointed out that the 7% threshold was first breached on September 10th after inflation data sparked fears of a Federal Reserve rate hike. He added that recent Federal Reserve statements, rising oil costs, and robust economic figures have consistently driven borrowing expenses upward.