A jump in oil prices after renewed hostilities in the Iran war is pushing up bond yields, and mortgage rates are doing the same. The average 30-year fixed loan rate rose 6 basis points Monday to 6.87%, according to Mortgage News Daily. This is the highest level since June 2025. It is now up 12 basis points since Thursday and more than 30 basis points over the past two months. “While rates are technically at their highest level in more than a year, they haven’t exactly exploded with surprising new momentum,” said Matthew Graham, chief operating officer of Mortgage News Daily. “Instead, it has been more of a slow grind fueled by the usual suspects: inflation expectations, high bond issuance and economic resilience. All three of these factors are subject to at least some variability going forward.” The expectation had been for rates to fall this year, but the war with Iran and its resulting rise in oil prices upended that. The day before the war started, at the end of February, the 30-year fixed rate was 5.99%. To put that in perspective, for someone buying a $450,000 home, which is around the national average, with a 20% down payment on a 30-year fixed mortgage, the monthly principal and interest payment today would be $2,363. That’s $207 dollars a month more than it would have been at the end of February. Get Property Play delivered straight to your inbox CNBC’s Property Play with Diana Olick covers new and evolving opportunities for the real estate investor, delivered weekly to your inbox. Subscribe here to get access today. And that’s just the payment. When rates rise, fewer borrowers can qualify for a mortgage, as the debt-to-income ratio that lenders rely on to make safe loans changes. Added to this is rising home prices, which now appear to be accelerating again in some parts of the country, due to tight supply. Nationally, prices in June rose 1.5% year over year, up from a 1.2% increase in May, according to the latest S&P Cotality Case-Shiller Home Price Index. “As financing costs remain high for prospective buyers, current homeowners remain reluctant to give up the low mortgage rates secured in previous years,” Rebecca Kaufman, associate director of commodities at S&P Dow Jones Indices, said in a news release. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.
