Home loan rates in the United States climbed higher this week, reaching levels close to the year’s peak as the ongoing war with Iran continues to impact borrowing costs.
Freddie Mac reported Thursday that the standard 30-year fixed mortgage rate increased to 6.52%, up from the previous week’s 6.48%. While this represents a weekly gain, current rates still sit lower than the 6.84% recorded twelve months ago.
Rising mortgage rates can burden homebuyers with additional monthly payments totaling hundreds of dollars, which decreases how much house they can afford to purchase.
Home loan rates respond to multiple economic forces, including Federal Reserve policy choices and bond market traders’ outlook on economic growth and inflation pressures. These rates typically move in tandem with the 10-year Treasury yield, which serves as a benchmark for lenders setting home loan prices.
Since the U.S.-Iran conflict erupted in late February, rates have primarily moved upward as the war has interrupted Persian Gulf oil shipments to global markets. This disruption has pushed oil costs significantly higher and contributed to rising inflation.
Market predictions of continued elevated oil prices throughout the extended conflict have maintained pressure on long-term bond yields, pushing mortgage rates generally higher.
Thursday’s midday bond trading showed the U.S. 10-year Treasury note yielding 4.53%, an increase from 4.47% seven days earlier. This compares to just 3.97% in late February before the war began.
