Mortgage rates retreat to 6.36% despite rising inflation
Mortgage rates edged down this week despite expectations they would rise, even as new inflation data showed that higher oil prices tied to the ongoing war in the Middle East are now spilling into other goods and services.
The average 30-year fixed mortgage rate fell to 6.36% for the week ending May 14, down from 6.37% the prior week, according to Freddie Mac. For comparison, rates averaged 6.81% during the same period in 2025.
The U.S. Labor Department reported Tuesday that the consumer price index rose 3.8% over the past 12 months through April, the highest level in three years, driven by surging oil prices following the closure of the Strait of Hormuz in Iran.
Even though the 10-year Treasury yield rose this week on expectations that inflation from crude oil would spread into other parts of the economy, Realtor.com senior economist Joel Berner said mortgage rates held steady as oil prices stabilized and demand for mortgage-backed securities increased.
Mortgage rates are shaped by a mix of economic conditions and borrower finances, but they closely track the 10-year Treasury yield, which reflects growth and inflation expectations. Lenders use that benchmark and then add a margin for costs, risk, and profit.
