US mortgage rates near 6.75% weigh on housing activity, with July pending home sales dropping 2.3% month-over-month.
Elevated US Treasury yields and rising mortgage rates are dampening the US housing market, with key indicators like Housing Starts and Pending Home Sales showing weakness. The 30-year mortgage rate has climbed to 6.75%, approaching a one-year high and nearing the 2023 peak of over 8%.
Pending home sales fell 2.3% in July, following a 4.8% decline in June, as affordability concerns grow. The rise in yields follows the July FOMC meeting, with real long-term yields driven higher by monetary policy uncertainty rather than inflation or fiscal risks.
Financial conditions are tightening, raising concerns about broader economic weakness and potential asset price corrections if yields remain at multi-decade highs.