Why Mortgage Rates Remain Elevated: Understanding the Connection Between Jobless Claims and Treasury Yields

If you’ve been wondering why mortgage rates remain stubbornly high, the answer lies in the strength of the U.S. job market and its impact on key financial indicators like the 10-year Treasury yield.

Let’s break it down: Mortgage rates often follow the 10-year Treasury yield, which reflects investor sentiment about the economy. As of early 2025, the 10-year Treasury yield is holding near 4.6%, a level that continues to support elevated mortgage rates. But why is the yield so high?

The resilience of the labor market plays a significant role. Recent data shows that jobless claims—an indicator of layoffs—remain low, with seasonally adjusted claims at just 211,000 in December 2024. This signals a strong job market, which reassures investors that the economy can withstand higher interest rates. As a result, the Federal Reserve has less incentive to cut rates, and bond yields stay elevated.

This dynamic has a direct impact on mortgage rates. For prospective homebuyers, it means rates may not decline significantly until there’s more evidence of economic softening, such as higher unemployment or slower job growth.

For now, we’re helping buyers navigate this high-rate environment with strategies like rate buydowns, adjustable-rate mortgages, and negotiating seller concessions. The strong job market might be good for the economy, but for homebuyers, it emphasizes the importance of creative solutions to make homeownership more affordable.

If you have questions about today’s rates or need advice on buying a home in this market, reach out to the Oklahoma Mortgage Group—we’re here to help!  Click here to schedule a phone chat with me now to discuss your next best steps.  Or feel free to call/text me at 918-361-1550.