New York — The rise in bond yields reached a critical threshold on Monday, with the 10-year Treasury yield hitting 5%, a level briefly touched in 2023 and otherwise not seen since 2007.

The 10-year yield’s rise to multi-year highs could mean higher costs for Americans who want to buy a home, finance a car or take out other loans. Bond yields have marched higher this year, pushing up borrowing costs for consumers, businesses and the US government. Yields have climbed despite efforts by Treasury Secretary Scott Bessent to quell concerns in the bond market.

The global bond market, dominated by the almost $32 trillion US Treasury market, has sold off as investors grapple with a mosaic of concerns, from soaring energy prices and expectations for central banks to raise interest rates to uncertainty about the war with Iran and unchecked government spending amid mounting debt.

The 10-year yield entered the year trading at 4.15%, and dipped below 4% in February. After the start of the war with Iran, yields sharply reversed course and started climbing – and they’ve yet to stop. The 10-year yield hit 4.5% in May before hitting 5% on Monday.

Higher bond yields translate into higher interest rates, making borrowing money more expensive. The housing market is where higher yields can really sting. Mortgage rates closely track the 10-year Treasury yield. As the 10-year yield has surged this year, the average 30-year mortgage rate has climbed to its highest level in more than a year.