Arabic version: عوائد سندات الخزانة ترفع تكاليف الاقتراض العقاري

According to Cnbc, mortgage and auto-loan borrowing costs are generally influenced more by 10-year U.S. Treasury yields than by the Federal Reserve’s benchmark interest rate. The 10-year Treasury yield closed at about 4.7% on Thursday, its highest level since January 2025.

Rates on 30-year fixed mortgages reached about 6.6% on Thursday, their highest level since August 2025, based on weekly Freddie Mac data. Fifteen-year fixed mortgage rates rose to about 6%, the highest since June 2025. While the Fed’s federal funds rate directly affects shorter-term borrowing costs such as credit cards and other variable-rate loans, longer-term consumer loans often move with Treasury yields.

Bond investors influence those yields through expectations for inflation and the future path of Fed policy. Investors may demand higher yields on longer-term Treasury bonds when they expect inflation to rise, reflecting the risk that inflation will erode future returns. Oil prices jumped sharply in July as tensions in the Middle East increased, and sustained high oil prices can feed into costs for airline tickets, transportation and goods.

Thomas Ryan, a North America economist at Capital Economics, said higher yields are another burden for households facing affordability pressures elsewhere. Capital Economics expects the Fed to raise interest rates three times this year, based on a broader view that inflation appears hot. Chad NeSmith, a certified financial planner and director of investments at Tobias Financial Advisors, said the largest effect on consumers is likely to be in housing. Higher mortgage rates could deepen the housing market’s lock-in effect, while costly auto loans may lead some consumers to delay buying a new vehicle.