Rates for home loans throttled higher in the most recent week, as the recent bond bloodbath closed in on the mortgage market.

The 30-year fixed-rate mortgage averaged 4.90% in the October 11 week, up from 4.71%, mortgage liquidity provider Freddie Mac said Thursday. That was the highest since April, 2011, and the biggest weekly move since last November for the popular product.

The 15-year fixed-rate mortgage averaged 4.29%, up 14 basis points. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.07%, up from 4.01%.

Those rates don’t include fees associated with obtaining mortgage loans.

Mortgage rates follow the path of the 10-year U.S. Treasury note TMUBMUSD10Y, 0.670% , but with a lag. Freddie’s “weekly” survey, though dated and released Thursday morning, tends to capture market activity from earlier in the week. That means this week’s reported mortgage averages largely reflect last week’s bond market activity.

The yield on the benchmark government bond has soared in early October to roughly seven-year highs as investors worry that increasing inflation will erode the value of fixed-income assets, and the government issues more and more supply to cover the growing budget deficit.

Bond yields rise as prices fall.

At Cleveland-based Nations Lending, which makes home loans in 47 states, business is “down,” CEO Jeremy Sopko said.

But for the most part that’s not because of rates. While higher borrowing costs have squeezed the company’s refinancing business — it’s down 27% year-to-date — Sopko thinks some of that volume may be made up by increasing interest in home equity loans and lines of credit.

Rather, it’s the lack of inventory in nearly every market that Nations serves that’s stifling activity. “We have a lot of people wanting to buy homes,” Sopko told MarketWatch.

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“Inventory is down, employment is way up but wage growth is stagnant, interest rates are spiking, and home prices are generally going up. A lot of potential home buyers just can’t compete in this kind of environment. They are being priced out and simply can’t qualify.”

Freddie Chief Economist Sam Khater echoed that idea in a release issued Thursday. “Rising rates paired with high and escalating home prices is putting downward pressure on purchase demand. While the monthly payment remains affordable due to the still low mortgage rate environment, the primary hurdle for many borrowers today is the down payment.”

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