US mortgage rates rise to 6.49%, reversing last week’s drop

[BOSTON] US mortgage rates climbed to 6.49 per cent, reversing last week’s drop, after US President Donald Trump declared the ceasefire with Iran over, fuelling concerns that renewed fighting may push up oil prices and keep borrowing costs elevated.

The average for a 30-year, fixed loan rose from 6.43 per cent a week earlier on Jul 2, Freddie Mac said in a statement Thursday (Jul 9). The rate was 6.72 per cent a year ago.

The war in Iran has rattled the property market since the conflict began on Feb 28. The ceasefire had raised hopes that easing geopolitical tensions would help stabilise borrowing costs. This week’s escalation risks erasing that optimism.

“Stubbornly high mortgage rates are a big part of what’s holding buyers back from making 2026 a major improvement over the past few years of home sales, and the current situation in Iran may keep them higher for longer,” said Joel Berner, a senior economist at Realtor.com.

Sales of previously owned US homes fell in June, with contract closings declining 2.4 per cent, the National Association of Realtors reported on Thursday.

And the road ahead looks bumpy. Zillow slightly raised its forecast for mortgage rates to about 6.3 per cent by the end of 2026, slightly higher than what buyers saw in the fall and winter of 2025, turning last year’s affordability tailwind into a headwind.

SEE ALSO

US mortgage rates decline to 6.43%, Freddie Mac says

US single-family home prices ease on a monthly basis in April

Asean Intelligence

Get insights into businesses across South-east Asia

Get the free report

“Zillow’s forecast still points to a drift, not a drop,” said Kara Ng, senior economist at Zillow Home Loans. BLOOMBERG