Key facts
- The average 30-year fixed mortgage rate in the U.S. rose to 6.52% this week.
- This rate is just below the year's high and up from 6.48% last week.
- The increase is linked to rising oil prices and inflation stemming from the U.S.-Iran conflict.
- The 10-year Treasury yield, a key benchmark for mortgage pricing, increased to 4.53%.
The average long-term U.S. mortgage rate has climbed to 6.52%, nearing its highest point of the year, according to mortgage buyer Freddie Mac. This marks an increase from 6.48% the previous week and reflects elevated borrowing costs for homebuyers.
Mortgage rates are influenced by factors including Federal Reserve policy, bond market sentiment, and inflation expectations. They generally track the 10-year Treasury yield, which has risen to 4.53% from 4.47% a week ago and was at 3.97% before the conflict between the U.S. and Iran began in late February.
The ongoing conflict has disrupted crude oil flows, leading to higher oil prices and contributing to increased inflation. This environment has kept mortgage rates trending upward since February, with the 30-year fixed rate not falling below 6% since late 2022.
While current rates are lower than a year ago, the upward trajectory and uncertainty have deterred many potential buyers, contributing to a housing slump that began in 2022. Sales of existing U.S. homes remain below historical norms, hovering near a 4-million annual pace, despite a recent acceleration in May.