The average long-term U.S. mortgage rate rose again this week, reaching its highest level in nine months and adding fresh pressure to a housing market already struggling with weak demand. Freddie Mac said Thursday that the benchmark 30-year fixed mortgage rate climbed to 6.53%, up from 6.51% the previous week. While still below the 6.89% level recorded a year earlier, the increase further reduces affordability for prospective buyers by raising monthly payments and limiting purchasing power.
The latest rise comes after mortgage rates have trended higher in recent weeks, driven largely by energy-market volatility tied to the war with Iran. The conflict has disrupted tanker traffic through the Persian Gulf, pushed oil prices higher and stoked inflation concerns. Mortgage rates are influenced by several factors, including Federal Reserve policy, inflation expectations and bond-market movements, and they generally move in line with the 10-year Treasury yield, which lenders use as a benchmark for home loan pricing. As expectations of higher oil prices lifted long-term bond yields, mortgage rates followed.
Bond yields eased somewhat this week on hopes that the United States and Iran may reach an agreement to reopen the Strait of Hormuz and restore oil flows. The yield on the 10-year Treasury note fell to 4.46% in midday trading Thursday from 4.57% a week earlier. Before the conflict began, in late February, the yield stood at 3.97%.
Borrowing costs on 15-year fixed-rate mortgages, often used by homeowners refinancing existing loans, also increased. Freddie Mac said the average 15-year rate rose to 5.87% from 5.85% last week, though it remained below the 6.03% level from a year ago. The current 30-year mortgage rate is now at its highest point since August 28, when it reached 6.56%, and it has not fallen back below 6% since slipping just under that level in late February for the first time since late 2022.
Higher rates are weighing on home sales during the spring buying season. Sales of previously occupied U.S. homes were essentially unchanged last month after falling year over year in the first three months of 2025, extending a housing slowdown that began in 2022 when rates started climbing from pandemic-era lows. New home sales also weakened, dropping 6.2% in April to a seasonally adjusted annual rate of 622,000, according to the U.S. Census Bureau. Through the first four months of the year, new home sales are down 6.5% from the same period last year, even as builders cut prices and offer incentives to attract buyers.
Mortgage application data also reflects the softer market. Applications for home purchases and refinancing fell 8.5% last week, according to the Mortgage Bankers Association, with refinancing activity accounting for much of the drop. One modestly positive sign is that purchase-loan applications are still running ahead of last year’s pace. Buyers in many markets are also benefiting from more available homes and softer listing prices, especially in the South and Midwest. Still, affordability remains a challenge. Realtors economist Jake Krimmel said buyers have more options, but their budgets do not stretch as far as they did earlier this year, and a resolution to the U.S.-Iran conflict could help stabilize mortgage rates and improve housing market momentum.
