U.S. 30-Year Mortgage Rate Rises to 6.66%, Highest in a Year
The average rate on a 30-year fixed mortgage climbed to 6.66% this week, the highest level since July, as higher oil prices and Fed policy uncertainty weigh on the housing market.
The average rate on a 30-year fixed-rate mortgage rose to 6.66% this week, according to Freddie Mac, marking the highest level in a year. The increase follows a period of declining rates that had fallen below 6% earlier in the year.
Higher oil prices after the conflict involving Iran and the closure of the Strait of Hormuz pushed up shipping costs and lifted yields on the 10-year Treasury note, a benchmark that influences mortgage rates. > "Oil prices always swing mortgage rates," said Kara Ng, senior economist at Zillow.
Gasoline prices also rose, with the average regular-grade gallon reaching $4.10, about $1.11 higher than before the conflict began, according to AAA.
Housing analysts noted that ongoing uncertainty about the Iran situation continues to dampen investor confidence. > "The best bet would be a decisive, conclusive, actually-sticks end to fighting in Iran," said Kate Wood, a housing expert at NerdWallet. She added that even a clear resolution might not fully restore market optimism.
The Federal Reserve kept its benchmark rate unchanged but indicated a possible hike in September, with three of the rate-setting committee members voting for an increase. The split signaled to markets that higher rates could be forthcoming.
Home prices have also contributed to a sluggish market. The National Association of Realtors reported that the median existing-home sale price in June exceeded $440,000, while overall sales fell 2.4% from a year earlier.