Mortgage rates hit highest level since the start of the war with Iran - WXOW

What the report says

WXOW, carrying a CNN report, said U.S. mortgage rates rose this week as renewed strikes in Iran unsettled financial markets and added another obstacle for homebuyers. The average 30-year fixed mortgage rate climbed to 6.55%, described in the report as the highest level in nearly a year. The rise reversed earlier hopes that lower borrowing costs would help revive the spring housing market after the average rate briefly moved below 6% in February.

The report linked the rate pressure to investor concerns that renewed Middle East fighting could lift oil prices and keep inflation elevated. Mortgage rates generally move with the 10-year Treasury yield, which CNN said became volatile as U.S.-Iran tensions reignited after a short ceasefire. Inflation, measured by the Consumer Price Index, eased to 3.5% in June from 4.2% in May, largely because energy costs had fallen, but the report said oil and gasoline prices have since moved higher again.

Housing data cited by the article showed weaker buyer activity. Pending home sales in June dropped 5.4% from the previous month and were down 0.3% from a year earlier, according to the National Association of Realtors. NAR chief economist Lawrence Yun said high mortgage rates combined with record national median home prices are leaving the market sluggish, particularly for first-time buyers. Mortgage Bankers Association data also showed applications fell 7% last week and were 2% below last year’s level.

CNN also noted that a recently enacted bipartisan housing affordability law seeks to increase supply and restrict some private equity purchases of single-family homes, but it does not directly control mortgage rates, which are driven by bond markets.