Mortgage Rates Rise Above 7%

President Trump welcomes Xi Jinping to the White House with pomp and pageantry, plus bond yields keep climbing and hitting their highest levels in decades. And mortgage rates are back above 7 percent, and they might stay there. Many are realizing that after years of waiting for rates to fall, this may just be the housing markets new normal. It's Thursday, September 24th. I'm Alex Osala for the Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. Today President Trump kicked off his state visit with Chinese leader Xi Jinping with an extravagant welcome ceremony. She and his wife, Peng Li Yuan, entered the White House on a red carpet. On the roof of the building, members of the U.S. military held Chinese and U.S. flags, and there was a flyover of U.S. fighter jets and a stealth bomber. Enjoying remarks from the White House, Trump said that he and Xi would discuss issues including national security, technology, and AI. The decisions we make in these areas today can promote peace and prosperity for decades and decades to come. Journal National Security reporter Robbie Grammer has been following the proceedings and is here to discuss. Robbie, how would you describe the tone of those first joint remarks this morning? There is this very warm surface level bromance that Trump is trying to strike here with Xi. This other great superpower leader here, even as there are all these tensions in the U.S. China relationship right now that they have to discuss this morning, Xi Jinping himself said the Thucydides trap can be avoided, which is really significant. The Thucydides trap is this wonky reference to ancient Greece where Athens and Sparta fought each other. It's this phrase used in international relations about a rising power and a superpower coming to a confrontation with each other. Is that inevitable? And so he brought that up to say, look, China is this rising superpower, America is the dominant superpower. There is a way in which we can avoid confrontation and we need to work to do that. It really seemed from their comments this morning that both leaders were trying to make nice. Xi talked about inviting American students to China and that he's sending a pair of giant pandas to the Atlanta Zoo. But under the surface, there are of course a lot of serious issues. We know from some reporting you've done, Robbie, that actually in the weeks and months before this summit, the Trump administration has been quietly holding talks with China about its nuclear arsenal. Some people have worried that China hasn't been complying with a ban on testing. What impact might that have on today's discussions? It's unclear right now if this will come up. Every attempt that the United States and successive administrations has made in trying to get China to engage in arms control talks, China has just said no. But right now what they're doing is they're talking about trying to at least increase transparency in how China is developing its nuclear weapons program. The U.S. earlier this year accused China of violating the comprehensive test ban treaty. This is something that China vehemently denies. But it's added this layer of pressure to the U.S.-China relationship. After all the diplomatic meetings today, Trump and Xi are expected to make more joint remarks this evening before their state dinner. What are you going to be looking out for as an indication of how the talks are going? I don't think you're going to see either leader here explosively jab the other one if they are saying that yes, maybe there will be extensions on the truce in the trade war. If they're saying yes, we both support increasing our military lines of communication. That's a good indication that the meeting yielded at least some results in trying to tamp down the tensions in U.S.-China ties right now. That was WSJ National Security Reporter Robbie Grammer. Thank you Robbie. Thanks for having me. In New York City, Israeli Prime Minister Benjamin Netanyahu spoke in front of the United Nations General Assembly. As Netanyahu took the podium, dozens of delegates walked out of the chamber, repeating a protest many also staged when Netanyahu spoke last year. In his speech, Netanyahu defended Israel's three-year multi-front war and called the absent delegates "moral cowards". He defended itself, Israel is also also defending many of the countries whose delegates just left this hall. In fact, I want you to know that many of their leaders even thank us privately for taking out Iran's nukes. Netanyahu's support is at a low around the world. The journal understands that he wanted a meeting with President Trump this week, but nothing materialized. U.S. and Israeli officials said that the meeting didn't come together due to scheduling constraints. There were also protests today against Netanyahu outside the U.N. Netanyahu has rejected accusations that Israel's aggressive military tactics amounted to genocide in Gaza. But his message today was primarily aimed at Israelis, who will vote next month on whether to replace him as Prime Minister, and he promised to continue to defend the state of Israel. Reporters from CNN, Politico, and MSNOW are back in the White House today after a federal judge lifted President Trump's ban. The journalists were initially turned away when they tried to enter the White House this morning. Trump had announced the ban in a social media post on Friday, citing what he described as "unfair coverage" of his administration. In today's ruling, the judge said the administration likely didn't follow due process, and he said the administration didn't back up the asserted national security interest in removing the reporter's press badges. The journalist's access is now in place for 14 days. The judge will decide whether to extend that while the case continues. We're exclusively reporting that a group representing the country's largest tech companies is asking the Trump administration to drop a $100,000 fee for new H1B visas. The Trump administration has been restricting legal immigration in different ways, as it tries to force companies to hire American workers. The H1B visa is important to the tech industry, and companies use the program to hire thousands of foreign workers every year. The tech group said today that the fee would make it harder to hire top talent, and that could set the U.S. back in the AI race against China. And New York State has sued Polymarket, saying that the prediction market company runs an illegal gambling operation. It's an escalation of the state's efforts to rein in the rapidly growing industry. Polymarket and its chief rival, Kalshi, are based in New York. The crackdown in New York is one of the highest-profile legal challenges that prediction market operators are facing around the country. Conflicting rulings have set up the fight to head to the Supreme Court. Polymarket said today that the company is staying in New York, and that it will fight for its users. Coming up, Ethiopia is back at war, what 7% mortgages mean for the beleaguered housing market, and the chic souvenir for Americans visiting France can be found in the dairy aisle, more after the break. Average 30-year mortgage rates have jumped above 7% this week. The first time they've gone that high since the beginning of last year. 30-70% isn't all that important economically, but psychologically, it's very important to buyers. Economists say that with mortgages above 7%, more potential buyers are likely to stay on the sidelines. That's bad news for the housing market, which is in its fourth year of stagnant sales. But Nicholas Miller, who covers the housing market for the Wall Street Journal, says there is some good news. Many homeowners who have been holding onto their low mortgage rates from years ago, are finally starting to sell. The housing inventory is much higher than it was in 2023, and is actually approaching pre-pandemic levels. That's good news for buyers who have more options in the market than they've had for years. It also shows that people, as they get new jobs and have children, realize they have to move no matter what the mortgage rate says. Many are realizing that after years of waiting for rates to fall, this may just be the housing market's new normal. And what's driving those mortgage rates higher? The jump in bond yields, as investors worry about inflation and government deficits. The 10-year treasury hit its latest 19-year high above 5.1% today, while the long-term bond the 30-year struck another 22-year high. The international oil benchmark Brent Crude rose 3.4% to more than $106 a barrel, while US stocks closed almost unchanged today. The biggest mover was the Dow, which ended down 0.3%. Starbucks plans to close around 250 underperforming cafes across North America this week. It's the second round of cuts under Brian Nichol since he took over as CEO two years ago. The company has been trying to streamline and make its operations more profitable, and Nichol has said that he wants to eliminate $2 billion in cost by the end of the 2028 fiscal year. And Ethiopia is at war again after a four-year truth collapsed between rebels and the government. Rebels in the Tigray region in the North of the country seized three airports and ejected government officials this week. Analysts say the conflict has the potential to spread throughout the region, including into neighboring Eritrea, which fought a 30-year war of independence against Ethiopia. And finally, for American tourists visiting France, the chic souvenir is no longer mini-ifle towers or drugstore skincare products, although I'll take some of those if you want. It's butter. WSJ had a story this week about the High Wire Act involved in getting butter back to the US. in one piece. And we've got someone with first-hand experience with us, our own Melanie Roy. She's a supervising producer on the audio team and she recently came back from Paris. So, Melanie, you flew home with some French butter. So, the day before I flew home, I went to the Grande Pisserie and it was packed. After you check out with your butter, they will give you a plastic bag. You pay a little bit extra for it. I think it's like two dollars. Before you exit the supermarket, there is a station. And there is a man at the station who puts the butter in the way it should be and then vacuum seals it for you. And then you take it back to your hotel. You ask them to put it in the freezer. And then on your flight, you put it in the checked bag people. Not the carry-on, the checked bag. So, the customs rule, as I found, is that if you're bringing in pasteurized butter up to around 11 pounds figure-owned use, that's totally fine. Did you worry about that at all? Absolutely not. I followed the rules of what I learned in my research as far as getting it vacuum sealed and freezing it and putting it in my checked bag. But really though, is it worth it for some butter? It is. You can taste the difference, I will say. But it also feels like a little treat to myself. Every time I have a little piece of butter, it feels like I'm back in Paris. Okay, you can invite me over and I'll try it. That was WSJ Supervising Producer Melanie Roy. Thank you Melanie. Thanks guys. And that's what's news for this Thursday afternoon. Additional sound today from Reuters. Today's show was produced by Anthony Bansy and Danny Lewis with Supervising Producer Tally Arbell. I'm Alex Osalof for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening. (upbeat music)