US Home Sales Hit 12-Year Low as Mortgage Rates Surge Above 7%

U.S. residential home sales have fallen to their lowest level in 12 years after mortgage rates climbed past the 7 percent threshold. The rise in borrowing costs has been driven by a combination of soaring global interest rates, record-high U.S. Treasury yields, and sharply higher energy prices that have reinforced expectations of persistent inflation.

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Bond yields in the United States have reached a 24-year high, while European sovereign debt markets are experiencing levels not seen in decades. These financial pressures have translated into higher mortgage rates for American borrowers, curbing demand for home purchases. At the same time, inflation expectations remain anchored to a “higher-for-longer” outlook, further reinforcing the upward trajectory of borrowing costs.

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The surge in borrowing costs is not confined to the United States. The United Nations has warned that several developing nations are confronting a liquidity crisis that could push millions into poverty. According to the UN, governments in the developing world are now allocating an average of 9.5 percent of their revenues to interest payments—the highest share in a quarter-century. This fiscal strain reflects the broader ripple effects of elevated global debt service obligations.

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The United Nations’ warning underscores the potential for widespread economic hardship as higher debt costs erode fiscal space in poorer economies. Both statements highlight concerns that the current wave of elevated borrowing costs may have far-reaching consequences beyond the U.S. housing market.

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