US mortgage rates hit one-year high as Iran conflict sends Treasury yields soaring

The average 30-year fixed mortgage rate jumped to 6.85% last week, according to the Mortgage Bankers Association, marking the highest level in more than a year. Freddie Mac’s parallel reading came in at 6.71%, telling the same story from a slightly different angle. The US-Iran conflict that escalated in late February has pushed oil prices toward $100 per barrel, and that pressure is now rippling directly into the cost of financing a home. How the conflict is repricing American mortgages Mortgage rates don’t exist in a vacuum. They track the 10-year Treasury yield, which has climbed to nearly 4.8%, a level not seen since late 2023. When investors dump bonds because they expect higher inflation ahead, yields rise. And when yields rise, so does the cost of a 30-year mortgage. Since the US-Iran conflict began escalating in late February, mortgage rates have climbed by 73 basis points. That’s nearly three-quarters of a percentage point in roughly six months, enough to add hundreds of dollars to a monthly payment on a typical home purchase. In the week ending September 4, overall mortgage applications fell by 2.7%. Refinancing applications, which are especially sensitive to rate movement...