The average 30-year fixed mortgage rate increased for the fifth consecutive week, rising to 6.46% as the ongoing war in Iran continues to roil financial markets, economists said.
The average mortgage rate ticked up 8 basis points to 6.46% this week, according to the latest Primary Mortgage Market Survey® (PMMS®), released by Freddie Mac Thursday, after last week increasing from 6.22% to 6.38%.
Bright MLS Chief Economist Lisa Sturtevant said President Trump’s speech Wednesday night sent “mixed signals about the conflict with Iran,” causing bond yields to move higher, which mortgage rates typically in turn tend to follow bond yields.
“We are in a period where the mortgage market is navigating a complicated intersection of geopolitics and domestic economic policy,” she said. “The spring housing market is in a holding pattern right now. The increase in inventory is being offset by increasing mortgage rates. Buyers and sellers had been hopeful that rates would fall below 6% this spring, but that looks a lot less likely.
“The volatility in rates will keep more prospective homesellers in their homes, particularly those with a sub-3% mortgage rate. And buyers are having to do new math to see how much they can afford with rates now close to 6.5%,” Sturtevant added.
Realtor.com Senior Economic Research Analyst Hannah Jones noted that the recent ascent in rates translates to a monthly payment roughly $115 higher than buyers faced just a month ago, a meaningful shift in affordability (calculated on a 10% down payment at March’s median home price). “This fast-changing mortgage math, combined with general economic uncertainty, could keep more buyers on the sidelines as the typically-busy spring market gets into full swing,” Jones said.
She added that if President Trump’s recent statement around the potential end of the conflict in Iran comes to fruition and the conflict is indeed coming to a close, “Mortgage rates are likely to continue their downward progress, returning some affordability to the market as wartime inflation fears subside. For now, buyers and sellers alike would be wise to stay nimble, those who can act quickly when rates dip may find meaningful windows of opportunity in the months ahead.”
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