Rising 10-Year Yields Keep 30-Year Mortgages Elevated Near 6.5%, Locking Up Housing Market

The average 30-year fixed mortgage hovers near 6.5%, remaining well above the sub-3% lows seen in 2021 despite pulling back from 8% peaks in 2023.
Driven by escalating federal deficits and defense spending, the long end of the yield curve continues to reprice higher independently of front-end Federal Reserve rate cuts. This structural shift has frozen the housing market, as homeowners with legacy 3% mortgages refuse to trade into higher financing rates, blunting the transmission of traditional monetary policy.