Mortgage rates rose above 6.5% this week as the United States and Iran escalated attacks, and oil prices jumped.
The average 30-year fixed-rate mortgage was 6.55% this week through Wednesday, up from 6.49% a week earlier, according to Freddie Mac data. The average 15-year mortgage rate was 5.93%, up from 5.82%.
After a period of relative stability last month, mortgage rates are on the rise again amid renewed concerns about higher oil prices and inflation. The 10-year Treasury yield, which mortgage rates closely track, has spiked in recent days as the US and Iran traded strikes after a ceasefire between the two nations fell apart.
Cooler inflation data released on Tuesday provided brief rate relief, but concerns about higher oil prices prevailed as oil climbed to over $80 a barrel.
“Mortgage rates are caught between cooler inflation data and renewed energy risks. Softer June inflation reduced the likelihood of a near-term Federal Reserve rate increase, but higher oil prices are keeping pressure on the inflation outlook and borrowing costs,” Zillow senior economist Kara Ng said in a statement.
Current mortgage rates appear to be discouraging home buyers and sellers. Mortgage applications dropped last week through Friday, according to the Mortgage Bankers Association. Housing contract activity also slipped last month.
Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.
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