The 30-year fixed mortgage rate reached 7.5% as Hepp spoke, a level that reflects the sustained pressure long-term Treasury yields have placed on home lending costs throughout this rate cycle.
That pressure stems from structural forces that Fed policy cannot easily reverse: expanding fiscal deficits, rising term premiums, shifting global capital flows, and evolving investor appetite for US debt.
As those dynamics have taken hold, bond yields have pushed mortgage rates higher in ways that have surprised many in the industry, reinforcing Hepp’s point about where brokers and their clients need to focus their attention.
What it would actually take to reach 9%
Hepp addressed the headline scenario — 9% mortgage rates — but was direct about what it would require.
“It’s possible that mortgage rates go up to 9%, but it’s really not our base case scenario,” she said. “It’s more of a severe scenario in which Treasuries go up to 6% or 7% and that would be really triggered by several major disruptions.”
