Horton's cancellation rate hit 20% on qualification failures, and loanDepot has collapsed 59% year to date as mortgage origination dries up. Annaly Capital rose 12% as higher MBS yields widened its net interest spread, while PNC jumped 25% repositioning its portfolio to a 4.4% yield. The 10-year Treasury, not the Fed, sets mortgage rates, and with CPI at 3.4% and the 10-year near 12-month highs, borrower relief looks distant.
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Horton (NYSE:DHI) sales office in suburban Dallas this week is looking at a 30-year fixed mortgage of 6.67% on the Freddie Mac Primary Mortgage Market Survey for the week ending August 13, 2026, and 6.75% on Mortgage News Daily's Tuesday reading. In late February, the Freddie Mac number was 5.98%. In the interim, the Federal Reserve did nothing.
Chair Kevin Warsh has held the federal funds target at 3.75% for 231 consecutive days. Your mortgage rate went up anyway. The mechanism is widely misunderstood.
The Fed sets a short-term rate. Mortgages price off the 10-year Treasury yield plus a mortgage-backed security spread. The 2-year Treasury, which tracks Fed policy, sits at 4.19%.
The 10-year, the benchmark for mortgages, auto loans, and student debt, is at 4.72%, in the 98.8th percentile of the past 12 months. The 30-year touched 5.323% Tuesday, a 19-year high, before easing to 5.28%. The short end, controlled by the Fed, has not.
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