Updated

With 10-year Treasury yields climbing sharply to multi-decade highs, mortgage rates have accelerated their climb, and some market observers now warn that 8% fixed mortgage rates are no longer merely theoretical but increasingly plausible in the near term. The sharp rise in bond yields, driven by stronger economic data and expectations for continued Federal Reserve rate hikes, has directly translated into higher borrowing costs for home buyers. Housing affordability has already been strained by the elevated rate environment, and further increases threaten to deepen headwinds for the residential market. The uncertainty about the U.S. economic outlook has only heightened the pressure, as investors reassess their expectations for both growth and inflation.