Mortgage Rates Cross 7% As The Bond Selloff Reaches Households

The 30-year mortgage crossed 7% in Freddie Mac's weekly survey on Thursday, the first reading above that mark since the start of 2025. It got there by way of the bond market, where a selloff that ran all week pushed long-term Treasury yields to levels last seen in 2004 and 2007. By Friday morning the selling had paused, on reports of a proposal to reopen the Strait of Hormuz.

Fast Facts

• Costco reported fourth-quarter net sales of $93.9 billion, up 11.2% from a year earlier, and profit of $6.75 a diluted share against $5.87 a year earlier (Read More)
• Starbucks is closing about 250 underperforming North American cafes this week and cutting about 900 jobs, at a cost of some $300 million (Read More)
• New claims for unemployment benefits fell by 1,000 to 197,000 in the week ended September 19, below the 201,000 economists expected (Read More)
• The Federal Reserve asked for public comment on two proposals setting rules for payment stablecoin issuers it supervises under the GENIUS Act (Read More)
• Jeff Bezos has put about $30 billion of his own fortune into Blue Origin as the space company works to build a revenue base (Read More)
• Drawdowns during the war with Iran have left the Strategic Petroleum Reserve, the government's emergency oil stockpile, at low levels (Read More)

Global News

• Bank lending to eurozone businesses halved in August, a sign higher borrowing costs after the European Central Bank's rate increase are holding back investment (Read More)
• Shares of the National Stock Exchange of India rose as much as 5.2% above their offer price on debut, after it raised $2.36 billion in the country's second-largest stock offering (Read More)
• Denmark's Novo Nordisk struck a licensing deal worth more than $1 billion days after an investor day that left shareholders asking what comes next, sending a Swedish partner's stock higher (Read More)
• Asian stocks ended Friday mixed in thin trade, with markets in South Korea, Taiwan and mainland China closed for public holidays (Read More)

Freddie Mac's Weekly Survey Put The 30-Year Mortgage Above 7% For The First Time Since Early 2025

Freddie Mac's weekly Primary Mortgage Market Survey, published Thursday, put the average rate on a 30-year fixed-rate mortgage at 7.03%, up from 6.95% a week earlier and 6.30% at the same point a year ago. The 15-year fixed average rose to 6.42% from 6.26%. It is the first reading above 7% in that survey since the beginning of 2025. One detail belongs with the number: the survey comes out once a week and covers borrowers putting 20% down with excellent credit, so it sits below the daily rate trackers that move faster and that we quoted at about 7.26% yesterday. Both figures are correct. They measure on different clocks.

The pressure is coming from the bond market. The 10-year Treasury yield closed Thursday at 5.18%, up 7 basis points on the day, meaning 7 hundredths of a percentage point. That is the highest reading in the Treasury's published series going back to 2007, and the figures we pull each morning are always the prior session's close.

Why does a government bond yield show up in a mortgage quote at all? Because mortgage rates track long-term Treasury yields rather than the short-term rate the Federal Reserve sets. A 30-year home loan is long-term money, and lenders price it against what long-term government debt pays. The arithmetic lands in a household budget fast. On a $400,000 loan, the difference between 6.30% and 7.03% is roughly $190 more a month, about $2,280 a year, on the same house at the same price.

The effects run in several directions at once. Buyers pay more each month for the same house; sellers face a smaller pool of people who can make that payment; owners holding cheap mortgages have less reason to move, which keeps the number of homes for sale tight. Homebuilders, whose slowdown we covered last week, borrow to build and feel higher long-term rates in their own costs too. What happens next is open. The Fed raised rates on September 17 for the first time in three years and meets again October 27-28 with nothing decided, and analysts quoted by MarketWatch have said 8% mortgage rates are "not an impossibility" if long-term yields keep climbing. That is their assessment, not a forecast from us.

Sources: Yahoo Finance on Freddie Mac's weekly survey · WSJ on what 7% does to the housing market · MarketWatch on the path to 8% · U.S. Treasury daily par yield rates · Rapunzl on last week's homebuilding slowdown

The Bond Selloff Reached A 22-Year Mark On Thursday, Then Paused Friday Morning

Yesterday's briefing led with Treasury yields at 19-year highs. One day later, the record being broken is older than that. U.S. government bonds sold off for a third straight session on Thursday, and the longest maturities moved furthest. The 30-year Treasury finished at 5.47% as of September 24, and Reuters put its high during Thursday's trading at 5.501%, a market quote rather than the Treasury's official close, and a level last reached in June 2004. Stocks stayed quiet through all of it: the S&P 500 slipped 1.90 points to 7,704.13, the Dow Jones Industrial Average fell 0.3% to 51,349.98, and the Nasdaq Composite added 3.34 points to 26,939.37.

Here is the part worth holding onto: every one of those rising yields is also a falling price. A bond pays a fixed number of dollars on a fixed schedule, so the less you pay for that stream of payments, the larger your return works out to be. Price and yield move in opposite directions, which means "yields rose" and "bond prices fell" describe the same Thursday. Three forces were pushing long-term yields up at once, and every outlet named the same three. Energy costs are feeding inflation. The economy is still growing faster than forecasters expected. And the government is borrowing heavily, the most concrete of the three: offer more bonds to roughly the same crowd of buyers and each one fetches a lower price, which is another way of saying a higher yield.

Then it stopped. By Friday morning, eurozone government-bond yields were falling, European stock indexes opened higher and were on course for a weekly gain, and U.S. stock futures, the contracts that trade before the opening bell, edged up. The trigger was reports that U.S. and Iranian negotiators had discussed a phased reopening of the Strait of Hormuz, and a senior Iranian official telling Reuters that Tehran could allow ships through within about seven days if Washington ends its naval blockade. Nothing has been agreed; this is a reported proposal, and the difference matters. Oil moved on it anyway. Brent crude settled near $107 on Thursday after Yemen's Houthis claimed attacks on Saudi Aramco facilities, then retreated Friday. That is the energy leg loosening, which is why a headline about a shipping lane showed up first in the bond market.

Sources: U.S. Treasury daily par yield rates · Investing.com on the 30-year reaching its highest since 2004 · WSJ on the selloff pausing · Nasdaq on European shares and the Hormuz reports · Rapunzl on yesterday's move in yields

Anthropic Committed $11.6 Billion To Akamai, And Got The Right To Buy A Piece Of Akamai

Akamai Technologies said on Thursday that Anthropic has committed $11.6 billion over seven years for cloud computing capacity, the rented computers that train and run AI models, on Akamai's infrastructure. An option could expand the deal by a further $9 billion, taking the potential total to roughly $20 billion. Akamai put its own spending on the initial commitment at about $5.5 billion, including roughly $1.7 billion extra this year to pre-purchase parts such as memory chips, and said it expects no change to its 2026 revenue guidance. Its shares jumped sharply. Worth noting who Akamai is: a content-delivery and edge-computing company, the kind that speeds up websites and video, not one of the three giant cloud providers that dominate AI infrastructure.

The genuinely unusual part is how Anthropic is paying. Alongside the cash, Akamai issued Anthropic a warrant, which is the right to buy shares at a set price later, that could eventually convey up to 5% of Akamai's outstanding stock, with about 2% expected to vest under the initial commitment. Read that slowly, because the loop in it is the lesson. The supplier is handing its own customer a claim on its shares, so the customer's spending helps build the value of the stake that same customer can then buy. It aligns them: Akamai lines up years of committed revenue, and Anthropic holds an interest in the infrastructure it depends on. It is not free. If the warrant is exercised, Akamai issues new shares and every existing shareholder owns a slightly smaller slice of the same company, which is what dilution means. The pattern is familiar by now, from Oracle's AI backlog to SoftBank's $11 billion bond sale for OpenAI: the money for computing power keeps arriving in structures more complicated than an invoice.

Sources: Yahoo Finance on Akamai's announcement · WSJ on the seven-year agreement · Akamai's 8-K exhibit filed with the SEC

What To Watch

Reporting Monday:

• Jefferies Financial Group (JEF), after the close, where analysts' average estimate is $1.04 a share against $1.05 a year ago
• Vail Resorts (MTN), after the close, where the average estimate is a seasonal loss of $5.37 a share against $5.08

Reporting Tuesday:

• Carnival (CCL), before the open, at an average estimate of $1.36 a share against $1.43 a year ago
• CarMax (KMX), before the open, at $0.67 against $0.64 a year ago

Data and the Fed:

• The Bureau of Economic Analysis is scheduled to publish gross domestic product, personal income and corporate profits on Wednesday, September 30
• The Federal Reserve's next meeting is scheduled for October 27-28, and whether it raises rates again is the question the bond market spent this week repricing
• Reports of an Iranian proposal to allow shipping through the Strait of Hormuz moved oil and bonds on Friday morning. Nothing has been agreed, and a confirmation or a denial would move both again

The Classroom Takeaway

A mortgage rate is a long-term interest rate wearing a household's clothes, so the fastest way to understand this week is to watch the 10-year Treasury yield and the weekly mortgage survey side by side for a month and see how closely one follows the other. Tracking a number on our live market data page every week teaches more than any single day's headline about it.