The Economist

Average US mortgage rates have climbed above 7% after a sharp rise in Treasury bond yields, worsening an already frozen housing market. Higher borrowing costs are pricing out buyers, discouraging homeowners with lower locked-in rates from selling, and deepening the gridlock between sellers, buyers and lenders. Economists warn affordability could deteriorate further if yields keep climbing.

Mortgage rates in the United States have reached 7%, strengthening the so-called lock-in effect, in which homeowners with cheaper existing loans refuse to sell and take on a new, costlier mortgage. The development tightens housing supply and keeps prices elevated, leaving prospective buyers facing both high borrowing costs and limited inventory.

Japan's national debt stands at roughly twice the size of its economy, the highest debt-to-GDP ratio among advanced nations. Despite this, economists argue the United States' debt burden—now around $40 trillion—is the more worrying case, citing the faster pace of American borrowing, rising interest costs, and fewer domestic savings to absorb government bonds.

AMP chief economist Shane Oliver says Brisbane houses are 61% overvalued, a striking assessment of Australia's property market after years of rapid price growth. The claim adds to debate about how stretched Australian housing has become, with Brisbane singled out among the most expensive cities relative to fundamentals. It is likely to fuel discussion among buyers, homeowners and analysts weighing whether prices can hold.

The Economist argues that falling student test scores around the world amount to a slow-moving catastrophe, with learning losses that could depress economic growth and widen inequality for decades. The leader column is drawing wide attention, with readers debating causes ranging from pandemic school closures to smartphones and changing teaching methods, and what governments should do to reverse the decline.