By Shaina Mishkin

So much for lower mortgage rates. Tuesday's bond-market upheaval sent the cost of a 30-year mortgage 0.14 percentage point higher, according to one daily survey.

The gain erases a move lower that followed a post by President Donald Trump saying he was directing Fannie Mae and Freddie Mac to buy $200 billion of mortgage-backed securities earlier this month. It also casts a shadow on hopes that sales of homes will ramp up this year.

Stocks of home builders and related companies dropped in Tuesday trading.

The average 30-year fixed mortgage rate on Tuesday was 6.21%, according to a survey of lenders published at midday by Mortgage News Daily. That was the highest since Jan. 8's survey -- the final reading before mortgage rates dropped toward 6% in response to Trump's post.

The rise in rates, which comes on the eve of an address by the president at Davos that is expected to deal with housing policy and other issues related to affordability, demonstrates how factors beyond the supply and demand for homes can change housing costs quickly.

Prospective home-buyers can blame 10-year Treasury yields. They took off on Tuesday in response to an increase in Japanese bond yields and concern that Trump's efforts to force Europe to sell Greenland could lead to a trade war, Barron's previously reported .

Neither tension over trade nor the Japanese bond market is necessarily on the radar of the typical home buyer. People are likely to be more concerned with what home prices and availability in their neighborhood mean for their prospects of buying a house. But changes in the 10-year Treasury yield inform the direction of mortgage rates.

The increase of 0.14 percentage point drags mortgage rates further away from the 6% level commonly cited as an important psychological threshold for would-be home buyers. Agents Barron's spoke with earlier this month, after mortgage rates fell, said that early signs pointed to higher buyer traffic higher than normal for January. The month is typically a slow time for sales.

The movement in the 10-year yield weighed on shares of home builders on Tuesday. The iShares U.S. Home Construction exchange-traded fund, which tracks the industry, was down 1.9% in early afternoon trading. Lennar and PulteGroup, two large home builders, were 2.2% and 2.3% lower, respectively. D.R. Horton, which reported earnings Tuesday morning, was roughly flat.

Horton, the largest public U.S. home builder, expects to continue to offer incentives to boost demand in its second quarter, executives said on a Tuesday morning call. Tactics such as offering free or discounted upgrades to a home, or paying to temporarily or permanently lower a buyer's mortgage rate, can help close deals at the cost of a builder's profit margin.

"Our incentive levels and home sales gross margin for the remainder of the year will be dependent on the strength of demand, changes in mortgage interest rates, and other market conditions," Jessica Hansen, D.R. Horton's head of investor relations, said on the call.

Write to Shaina Mishkin at shaina.mishkin@dowjones.com

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January 20, 2026 15:24 ET (20:24 GMT)

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