Mortgage rates surged to 6.97% this week, fueled by rising 10-year Treasury yields and inflationary pressures from global oil price spikes, creating significant affordability hurdles for homebuyers.
10-year Treasury yields hit 5% this week, well up from earlier in the year, reflecting rising inflation and a Fed rate hike.
Oil prices spiked amid the Iran conflict, directly pushing inflation up and lifting mortgage rates.
National home prices grew 1.5% year-over-year in June, accelerating, but with signs of dips in many formerly hot markets.
The 30-year fixed mortgage rate climbed to 6.97%, marking the highest level since February 2025. Driven by persistent inflation and a 5% yield on 10-year Treasurys, the rising cost of borrowing is cooling the housing market and sidelining prospective buyers.
Mortgage rates are primarily driven by 10-year Treasury yields and broader inflation metrics. While some housing markets are seeing price dips, the overall inflationary environment and the Federal Reserve's recent rate hikes have pushed borrowing costs to their highest levels since early 2025.