On May 11, 2026, a “For Sale” sign is posted in front of a property in Los Angeles, California.
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Signs coming out of prediction markets say don’t wait for mortgage rates to drop later this year to lock in your loan.
After 30-year fixed mortgage rates hit their highest level since July 2025 on Tuesday, Kalsi traders became more confident that rates will rise above 6.8% this year, and possibly as high as 7%.
The 6.75% interest rate, reported by Mortgage News Daily, comes as the 30-year Treasury yield soared to its highest level since 2007 and threatened to push the 10-year Treasury yield to its highest level in years. The 10-year bond is an important benchmark for mortgages.
Kalsi currently has multiple markets that predict in numerical ranges how high mortgage rates will go this year. On Tuesday, the probability that interest rates would rise above 6.8% rose from 43% to 50% within hours. Odds that mortgage rates will exceed 7% at some point this year have also skyrocketed. Traders saw that chance as slim on Monday, but that probability jumped to 23% on Tuesday after market yields soared.
The 30-year fixed mortgage rate has increased 33 basis points in the past 10 days, and is up 46 basis points from 6.29% in April. Mortgage rates have been volatile since the Iran war, with interest rates at 6.64% in March, but falling in April. A basis point is equal to 0.01%.
Oil prices were steady on Tuesday after President Donald Trump announced he was postponing a planned military strike on Iran, but still far from levels seen before the start of the war since February.
Amid geopolitical uncertainty, soaring oil prices weighed on last week’s inflation report, with consumer prices rising 3.8%, the highest level since May 2023. As inflation permeates, mortgage interest rates are likely to remain high.
Calci bases its market decisions on mortgage rate data from Freddie Mac, which is calculated weekly and tends to show lower interest rates than Mortgage News Daily.
It is true that even with higher interest rates, purchasing appetite has not diminished yet. Tuesday’s report from the National Association of Realtors also found that pending home sales increased both month-over-month and year-over-year in April.
Disclosure: CNBC and Kalsi have a commercial relationship that includes customer acquisition and minority ownership.
