Mortgage rates sit at their worst levels in over a year
September 25, 2026
Borrowers checking financing costs this Friday, September 25, 2026, are facing a market that has turned defensive. Treasury yields climbed to territory last seen in 2007, and mortgage bond prices fell with them. Consumer mortgage pricing is at its worst in more than a year, close to the highest borrowing costs in about 18 months. Across short locks and longer ones, the guidance is to lock.
The selloff had more than one driver. A surprisingly strong PMI report brought rate-hike fears back, and weak demand at the 5-year and 7-year Treasury auctions showed investors were reluctant to buy. Oil prices moved higher, and geopolitical tension added weight on bonds. Mortgage-backed securities fell 56 basis points and closed at a price of 98.34 in that decline. A 10 basis point gain in the latest MBS reading is far too small to undo the unfavorable repricing borrowers already saw on rate sheets.
Affordability is where this market shows up for households. The same home price now comes with a higher monthly payment than it did when pricing was more favorable, and some buyers will drop to a lower tier or pause. With costs near an 18-month high, less of the monthly budget is left for taxes and insurance. Sellers who need a financed buyer should expect shoppers to judge the house by the monthly payment. Anyone who has watched a listing for a few weeks should recalculate before offering, because rate sheets repriced unfavorably through this move.
Buyers under contract should lock. The guidance is the same for seven days, 15 days, 30 days, and timelines past 30 days. Waiting on a rebound means carrying the risk of still-higher yields if auctions stay soft and oil keeps climbing. Shoppers who have not signed a contract can keep touring, as long as the preapproval and payment quote match this week's pricing. Sellers can keep a deal together with a realistic price or a credit that brings the buyer's payment back into range.
This Friday closes a week in which fear of further Fed hikes overwhelmed an early attempt at a bond recovery. Pricing is worse, and the practical response is to protect loans that are already moving toward closing. A durable improvement has to show up in mortgage bonds before floating is a sensible default again.