US mortgage rates go up as Iran war ripples through financial markets
Average 30-year fixed-rate rate rises to 6.11%, up for second week in a row
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[NEW YORK] Mortgage rates in the US are rising again, ending – for the time being – a decline that offered hope to homebuyers struggling to afford housing.
The average 30-year fixed-rate mortgage rate in the US rose to 6.11 per cent, mortgage-financing giant Freddie Mac said on Thursday (Mar 12).
It is the second week in a row that rates have risen.
The average had slipped below 6 per cent for the first time in years in late February, raising confidence among buyers and sellers that the long-frozen market might finally begin to loosen.
Days later, on Feb 28, the US and Israel attacked Iran, setting off an energy crisis and raising new inflation concerns in financial markets.
The result was a jump in the yield on government bonds, and falling expectations for interest rate cuts later in 2026.
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The yield on the 10-year Treasury note, which acts as a broad-reference interest rate that underpins the US mortgage market, climbed to 4.25 per cent on Thursday, from below 4 per cent before the war began.
Homebuyers have already been struggling with high prices, as well as rising insurance and property taxes.
Mortgage rates were one source of relief, having fallen from much higher levels in recent years. Even at 6.11 per cent, rates are well below their recent peak of 7.8 per cent in October 2023, which was the highest level in decades.
The housing market has been stuck since the pandemic. Record-low interest rates during that period kicked off a buying frenzy that sent home prices soaring.
Millions of homeowners refinanced their mortgages at those low rates – many below 4 or 5 per cent – leaving them reluctant to sell and take on a new mortgage when rates later rose.
A recent New York Times poll with the Siena Research Institute found that a majority of Americans feel homeownership is out of reach.
As a result, about one in four of them are delaying major purchases such as buying a home, a recent report by real estate brokerage Redfin said.
Housing sales remain uneven. Existing-home sales in February rose 1.7 per cent from January, said the National Association of Realtors. Yet, sales were down 1.4 per cent from February 2025.
Home prices have also shown little growth.
National median existing-home prices rose less than 1 per cent, the association added.
“Despite the modest gain in home sales, actual housing demand remains muted relative to wage growth and job gains,” Lawrence Yun, its chief economist, said in the report. NYTIMES
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