Economists say renewed doubt about a resolution to the war in Iran kept Treasury yields and thus mortgage rates elevated this past week with the average 30-year hitting its highest point since August of 2025.
The average 30-year fixed mortgage rate (FRM) rose 6 basis points to 6.55% from 6.49% last week, and the 15-year FRM averaged 5.93%, up from 5.82% last week, according to the latest Primary Mortgage Market Survey® (PMMS®), released by Freddie Mac Thursday.
The 30-year FRM still remains lower than it was at the same time last year (6.75%); the 15-year FRM is now higher than it was a year ago (5.92%).
Despite the rising rates, Sam Khater, Freddie Mac’s chief economist said the overall market for home shoppers is “modestly improving.”
“Purchase application demand has weakened recently, but housing affordability is more favorable and housing inventory continues to rise, thus the backdrop for prospective homebuyers is modestly improving,” Khater said.
Realtor.com Senior Economist Hannah Jones pointed to June CPI data which showed headline inflation cooling to 3.5% and core inflation easing to 2.6%, as a welcome sign for rate-watchers, but cautioned that the conflict in the Middle East flaring up again is pushing up oil prices as well as Treasury yields, which rates tend to track.
Still, Realtor.com’s midyear forecast still calls for mortgage rates to ease modestly over the second half of the year, and this week’s inflation data supports that view over the long run, Jones notes, but adds the near-term path remains hostage to how the Iran situation develops.
“The housing market has otherwise continued shifting in buyers’ favor this year, with prices cooling, inventory building and sellers offering more concessions,” said Jones. “A cooler CPI reading is a step in the right direction, but until mortgage rates actually follow suit, buyers will keep feeling the pinch of stubbornly high borrowing costs even as other conditions improve.”
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