Mortgage Rates Today, Tuesday, October 20: A Slight Increase

Mortgage interest rates are a smidge higher this morning as Wall Street regains some of its confidence in tech.

The average interest rate on a 30-year, fixed-rate mortgage rose to 7.23% APR, according to rates provided to NerdWallet by Zillow. This is three basis points higher than yesterday but seven basis points lower than a week ago. (See our chart below for more specifics.) A basis point is one one-hundredth of a percentage point.

Mortgage rates had been moving lower as investor concerns about AI profits suddenly made bonds seem more appealing. Increased demand drove bond prices up and yields down, which also pulled down mortgage rates. How does any of that work, and how the heck are these things even related? Keep reading below the chart and I’ll explain the whole thing.

Average mortgage rates, last 30 days

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🤓 Kate on Rates, 10/15/26

📈 What influences mortgage rates?

Mortgage rates are constantly changing, since a major part of how rates are set depends on reactions to new inflation reports, job numbers, Fed meetings, global news … you name it. For example, even tiny changes in the bond market can shift mortgage pricing.

Like I mentioned above, mortgage rates started edging lower last week as Treasury yields came down. Mortgage rates are generally benchmarked to the yield on 10-year Treasury notes, so where the yield goes, rates go, too.

The yield is basically the return investors get on a bond. A bond is a little piece of government or corporate debt; when an investor buys a bond, they’re making a tiny loan to the issuer. The issuer agrees to pay them back a set amount over the bond’s lifespan (that’s the yield), and when the bond matures, the investor gets the bond’s original price back. That’s why unlike anything-could-happen stocks, bonds are generally considered relatively low risk.

A bond investor who buys a bond at issuance knows immediately: Here’s my cost, here’s what I’ll earn and here’s when my initial <a s how that works. If you bought a $100 bond with $5 annual yield payments, that yield is 5%. But say you want to sell that bond but can’t find a full-price buyer; the best price you can get for it is $80. The annual yield payments are still $5, but since they're relative to that lower price, the yield is now 6.25%.

For much of the summer and early fall, we saw lots of Treasury bond selling, which drove prices down and yields up. That kept pushing mortgage rates higher. Additionally, tech

Massive corporate bond issuance by big tech firms was one reason we saw a Treasury sell-off this summer.

Last week, that dynamic reversed as doubts crept in about the potential profits from AI. September’s Consumer Price Index, which came out last Wednesday, and Producer Price Index, from Thursday, showed that inflation’s still running hot. If prices are climbing, the costs of building data centers and other AI infrastructure will increase, right? So to get solid returns on these investments, tech companies are going to have to make some serious profits. That right there is where some investors are having misgivings.

It sort of played out like a teen movie. Investors realized that the hot, popular girl (tech stocks) might not actually be all that, and their eyes turned to the reliable girl-next-door who’d been there for them all along (Treasuries).