Aspiring homebuyers got more discouraging news last week as the nation’s most widely used home loan became even more expensive, with rates now at their loftiest point in nearly a year — and experts say relief is not likely coming anytime soon.
According to the Mortgage Bankers Association, the contract rate on a 30-year fixed-rate mortgage climbed 4 basis points to 6.69% during the week ending July 17. That matches the rate last recorded during the week of August 22, 2025, making it an 11-month high.
Since the U.S. and Israel began military strikes against Iran in late February, mortgage rates have climbed a total of 0.60 percentage points. Those attacks pushed global oil prices higher, which in turn has contributed to broader inflation pressures. By the Federal Reserve’s preferred measurement, inflation is currently running at roughly double its 2% annual target.
A brief dip in energy costs occurred in June as peace negotiations showed some promise, but the renewed fighting has sent those costs back up. That has heightened concerns among some Federal Reserve officials that interest rate hikes may be needed sooner rather than later to get inflation under control.
MBA Chief Economist Mike Fratantoni addressed the situation directly: “Incoming data showed that inflation dropped in June, but with oil prices spiking again, that improvement seems unlikely to continue in July data, and mortgage rates are likely to remain higher as a result.”
Federal Reserve policymakers are scheduled to meet next week. Although a rate hike at that meeting is still considered unlikely, markets are widely anticipating at least one quarter-point increase to the current policy rate range of 3.50% to 3.75% before the year is out, given the persistent inflation overshoot.
Perhaps more significant for potential homebuyers is what’s already happening in the bond market. The yield on the 10-year U.S. Treasury note — which has a strong influence on where mortgage rates land — has risen by more than a quarter percentage point since late June and closed Tuesday at its highest level in two months.
