Middle East War Pushes Mortgage Rates Higher, Pressuring U.S. Housing Market
The war in the Middle East is weighing on the U.S. housing market, with mortgage rates rising for a fourth straight week and adding pressure on Americans already facing high housing costs.
The average 30-year fixed mortgage rate rose to 6.38 percent, according to Freddie Mac, up from 6.22 percent the week before and the highest since early September. That is still below its 7.79 percent peak in October 2023. Rates had been declining before the war, falling below 6 percent in late February and raising hopes more buyers would enter the market, but they have since climbed steadily.
Mortgage rates are influenced by the yield on the 10-year Treasury note, which has risen as the war deepens uncertainty for investors. President Trump has said that Iran is willing to negotiate a possible cease-fire, a proposal that the Iranian government has publicly dismissed.
The war is also expected to slow new home construction this year, according to Oxford Economics. “Unless the war ends quickly, higher mortgage rates and softer labor market conditions will weigh on residential spending this year,” said Nancy Vanden Houten, the firm’s lead U.S. economist.
