Summary
U.S. mortgage rates are climbing again just as the home-buying season begins. The average rate on a 30?year fixed mortgage rose to 6.46% last week, the highest since early September, according to Freddie Mac?962455215935546†L194-L218?. The surge comes as the ongoing conflict in the Middle East has blocked about a fifth of global oil shipments through the Strait of Hormuz and disrupted fertilizer supplies, pushing energy and food prices higher and fanning inflation?962455215935546†L194-L218?. Since the start of the war at the end of February, oil prices have jumped to around $110 per barrel and U.S. bond yields have surged, driving up mortgage rates which follow the 10?year Treasury yield?962455215935546†L194-L218?.
The 30?year rate is almost a half percentage point above its level before the war began?962455215935546†L194-L218?. Higher borrowing costs are already reducing affordability for prospective buyers and could dampen what is typically the busiest season for housing market activity. The Trump administration had sought to make housing more affordable by directing Fannie Mae and Freddie Mac to buy more mortgage?backed securities, which temporarily lowered rates, but the war?driven surge in energy prices has reversed those gains. With inflation pressures building, the Federal Reserve may be forced to delay rate cuts, keeping borrowing costs elevated for longer.
Buyers planning to purchase homes this spring may need to adjust expectations or consider locking in rates sooner. Financial planners recommend comparing lenders, keeping credit scores strong and exploring adjustable?rate or shorter?term loans as alternatives. Homeowners with existing adjustable?rate mortgages should review their refinancing options in case rates continue to rise. While no one can predict how long the war?related disruption will last, staying informed about economic developments and maintaining a flexible budget can help households navigate an uncertain housing market.
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