As recently as Tuesday, Sept. 8, mortgage rates seemed unlikely to reach 7%.
Fast forward 48 hours, and the average 30-year fixed mortgage rate hit 7.07%, according to Mortgage News Daily data.
The MND mortgage rate was 6.89% on Sept. 8. Then it jumped by 0.08% on Sept. 9 and 0.10% on Sept. 10. Those are significant increases — until now, the largest day-to-day rate change in the past month had been 0.06%.
“This is a substantial 2-day change and the highest rate we’ve seen since May 21, 2025,” Chief Operating Officer Matthew Graham wrote for MND.
Many Americans are probably wondering why rates changed so quickly. But the 10-year Treasury yield makes the picture clearer.
Why the 10-year Treasury yield is nearing 5%
Several factors influence mortgage rates, including the 10-year Treasury yield. When the 10-year Treasury yield increases significantly, there’s a good chance that the 30-year fixed mortgage rate will also go up.
The 10-year Treasury yield opened at 4.83% on Wednesday, Sept. 9, per CNBC. By the end of Sept. 10, it had reached 4.95% — its highest point since Nov. 1, 2023.
The rise in Treasury yields coincided with mortgage rates reaching their highest point in more than two years.
“There are only two real factors that account for a vast majority of the upward movement,” Graham wrote on Sept. 10.
“The first was yet another surge in fuel prices,” he continued. “The second was a poorly received Producer Price Index this morning (an inflation report that contributes to the even more important PCE inflation data due out at the end of the month).”
How fuel prices helped push mortgage rates past 7%
Oil prices surged after the U.S. and Israel attacked Iran on Feb. 28, 2026, and mortgage rates increased along with them. Spikes in energy prices often cause more inflation concerns. Those inflation concerns can push Treasury yields — and mortgage rates — higher.
Over the last several months, mortgage rates have ticked down when the public is hopeful about an end to the U.S.-Iran war and inched up when people are pessimistic.
Brent crude, the global benchmark for oil prices, closed below $100 on Sept. 8, per Yahoo Finance. It surpassed $100 on Sept. 9, then exceeded $107 on Sept. 10.
“The move reflects a market still pricing in persistent geopolitical risk, with Persian Gulf tensions showing no credible path to de‑escalation,” ING analysts said on Sept. 9. “If anything, current signals point to further escalation, keeping upside pressure firmly in place.”
Inflation data is also hurting mortgage rates
To make matters worse, the Producer Price Index released Thursday morning, Sept. 10, showed that producer prices increased 0.4% in August, seasonally adjusted, from July. July’s increase was 0.1%.
The PPI reading could add to concerns that inflation will remain elevated when the Personal Consumption Expenditures (PCE) price index is released.
The Bureau of Economic Analysis will release the PCE on Sept. 30. It’s the most important inflation measure the Federal Reserve considers when making monetary policy decisions.
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The CME FedWatch Group already shows that markets expect the Federal Reserve to hike the federal funds rate at its Sept. 15-16 meeting. If a disappointing PCE report raises expectations for additional Fed rate hikes later in 2026, mortgage rates could face further upward pressure.
This combination of factors has helped drive mortgage rates past 7% in just a couple of days.
Will mortgage rates stay above 7%? No one has a crystal ball, and there are cases for either outcome. But to get a sense of where rates are headed, keep an eye on the war in Iran, oil prices, inflation, and — of course — the 10-year Treasury yield.
Related: Will the housing market crash in 2026? Experts weigh in
