Mortgage rates have been rising lately for 3 reasons. First, the FDIC assumed $114 billion in Treasuries and mortgage bonds on April 6th after taking over Silicon Valley Bank and Signature Bank and they began selling their holdings shortly thereafter which continues today. And April 6th saw the lowest yield since early September on the 10-Year Treasury Note at 3.30%. In addition, banks have reduced their bond holdings by over 36% in March and April as customers withdraw money from their banks. This extra supply of bonds caused by all this selling has caused prices to drop and yields or rates to rise.
Second, the debt ceiling impasse is causing some headaches and fear for bond investors and fear is causing investors to sell their bond holdings, thus increasing supply and causing yields or rates to rise. Then, once the debt ceiling impasse is solved the Treasury will have to issue a ton of new debt. This extra supply of bonds could cause yields or rates to increase further even though inflation is dropping.
Third, several Fed members have been speaking and saying that their rate increases are not done. I am worried that each Fed rate increase will cause more banks to fail and more commercial real estate foreclosures.