Mortgage rates rise as 10-year yield jumps

"Higher prices are inflationary. Rising inflation causes the 10-year bond yield to rise and mortgage rates along with it, Cohn said in a statement. As long as oil prices remain elevated, mortgage rates will be as well. With no end in sight to the war, higher rates are here to stay for the foreseeable future."

"Kyle Bass, production business manager at Refi.com (an affiliate of Mortgage Resource Center and Veterans United Home Loans), said last week that refinance activity is softening as borrowers continue to adjust to a higher-rate environment. But this is simultaneously boosting demand for home equity lines of credit (HELOCs) and similar solutions that keep homeowners in their current low-rate, first-lien mortgages."

"Refi.com's recent home equity analysis found that HELOC originations increased to more than 504,000 in 2025 from roughly 456,000 in 2024, while the average approved HELOC credit limit climbed to approximately $135,000 as homeowners become increasingly strategic about using their equity while preserving favorable first-mortgage financing, Bass said in a statement."

"Generally, a Warsh-led Fed could be modestly more dovish on rates, anchored by productivity optimism, while still carrying a hawk's credibility, said Selma Hepp, chief economist at Cotality. For housing, the key is whether he builds consensus across the Fed that reduces policy and mortgage-rate volatility, and keeps affordability from slipping further for households. The Fed will not be in a position to cut rates, and i"

Rising inflation linked to the ongoing war in Iran is driving higher mortgage rates through increased 10-year bond yields. Elevated oil prices are expected to keep mortgage rates high for the foreseeable future. Refinance activity is softening as borrowers adjust to higher-rate conditions. At the same time, demand is increasing for home equity lines of credit and similar products that allow homeowners to stay in their existing low-rate first-lien mortgages. HELOC originations rose to more than 504,000 in 2025 from about 456,000 in 2024, and average approved credit limits increased to roughly $135,000. Senate confirmation of Kevin Warsh as Federal Reserve chair raises expectations of potential policy shifts, but rate cuts are not expected soon, with possible rate hikes discussed for late 2026 or early 2027.

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