Mortgage Rates Update: July 10th, 2025

In this week’s update, economist Bill Knudson highlights a modest uptick in mortgage rates, even as Treasury yields remained unchanged. While the headline movement is small, the underlying data points to a recalibration in lender behavior and risk pricing.

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For a $100,000 loan at 6.72%, the monthly payment is $647.  The good news is mortgage rates have slowly moved away from the 7.00% level.

Upcoming releases:

• The next new jobs report is August 1 ----Actual for July 3  moderate 147,000 with unemployment decreasing from 4.2% to 4.1%.

  
  

• The next CPI release is July 15

• The next Fed meeting is June 30

Mortgage Rates Update: July 10th, 2025

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Key Highlights:

• Mortgage Rate Rises Slightly: The 30-year fixed mortgage rate rose 5 basis points (bp), from 6.67% to 6.72%. For a $100,000 loan, this added $3 to the monthly payment, now $647.

• Cost Structure at 6.72%:

  • Net interest cost: $392/month (61% of payment)

  • Amortization: $87/month

  • Income required to qualify: $27,712

  • Income multiplier: 3.6x

• Yield Spread Update:

  • The spread between the 10-Year Treasury (4.35%) and mortgage rate increased slightly to 237bp.

  • This remains 69bp above the historical average of 168bp, offering a "safety cushion" for lenders.

• Market Context:

  • CPI held at 2.4%

  • Treasury yields were flat; mortgage rate movement was lender-driven.

Knudson emphasizes that while the Fed is on pause and Treasury markets stable, lenders continue to price conservatively. The persistently elevated spread suggests a hedging strategy against rate volatility or credit risk. For borrowers, the short-term trend remains stable—but the margin signals caution, not comfort.